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27 July 2011
Former EPA-CID Special Agent Charged with Perjury and Obstruction of JusticeRead the Press Release
WASHINGTON — A former Special Agent with the Environmental Protection Agency (EPA), Criminal Investigation Division (CID) in Dallas, Texas, was charged today with allegedly lying under oath and obstructing justice, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
A two-count indictment returned today in the Western District of Louisiana charges Keith Phillips, 61, of Kent, Texas, with obstruction of justice and perjury stemming from his sworn testimony in relation to a case currently pending in the Western District of Louisiana.
According to the indictment, from September 1996 to Dec. 14, 1999, Special Agent Phillips and a Special Agent from the FBI participated in a criminal investigation that led to the indictment of Hubert Vidrine Jr., and several others. The criminal charges against Vidrine were ultimately dismissed, and Vidrine, in turn, filed a civil lawsuit against the United States for malicious prosecution. During a deposition taken in the course of Vidrine’s civil suit, Special Agent Phillips allegedly falsely testified that he did not have an affair with the FBI Special Agent, when, in fact, he did. The indictment alleges that it was material to the civil lawsuit to determine any potential motives of the criminal investigators in investigating and prosecuting the charges against Vidrine, and that Phillips committed perjury when he testified falsely about the affair and obstructed justice when he provided this false testimony. The indictment further alleges that he then contacted the FBI Special Agent to influence her not to disclose the existence of the affair.
If convicted, Phillips faces a maximum of 10 years in prison and a fine of $250,000 on the obstruction of justice count and five years in prison and a fine of $250,000 on the perjury count.
The case is being prosecuted by Marquest J. Meeks of the Criminal Division’s Public Integrity Section. The case was investigated by the EPA Office of Inspector General.
An indictment is merely an allegation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Federal Agencies Teach Leadership Skills, Hear from Students at<br /> 2011 Intertribal Youth Summit in Santa Fe, New MexicoRead the Press Release
WASHINGTON – One hundred and seventy five young men and women from nearly 50 tribal communities across the country have convened at the week-long 2011 National Intertribal Youth Summit in Santa Fe, N.M., which runs from July 24-28, 2011. The summit features administration officials from the White House and the Departments of Justice, Interior, Health and Human Services and Education, and it coincides with the one-year anniversary of President Obama’s signing of the Tribal Law and Order Act (TLOA) into law.
The 2011 National Intertribal Youth Summit is a youth leadership conference for tribal youth participants to meet other American Indian and Alaska Native youth through special sessions targeting leadership development and critical youth issues such as healthy relationships and lifestyles, education, substance and alcohol abuse, cultural preservation, community development and protecting the environment.
The summit also provides an opportunity for Obama administration officials to hear directly from youth in Indian Country. The administration and federal agencies have made a commitment to building healthier and safer communities through strengthened coordination and collaboration with tribal partners.
“You are the future, and the small choices you make can have an enormous impact on your communities,” Associate Attorney General Tom Perrelli told the group of assembled students. “Tribal communities face unique challenges, and it can’t be overstated the importance of your leadership in securing a bright future for your friends, families, and neighbors.”
In response to requests from tribal leaders for the development of more culturally appropriate prevention, early intervention, treatment, rehabilitation and reentry programs for tribal youth and families, the Justice Department launched the Youth Summit initiative to promote long-term improvement in public safety in tribal communities.
The summit’s focus was on youth voices. During the week-long session, participants had the opportunity to create a Public Service Announcement (PSA) to run in their communities. In a special session called Voices of Youth, participants shared thoughts, concerns and recommendations on ways to address public safety and positively impact the lives of youth across Indian Country—providing a platform for honest dialogue with federal officials. Additional workshops provided tribal youth with knowledge and skills in leadership development and strategies for achieving academic and career success.
Youth were nominated by their tribal youth program coordinators and submitted an application to attend the summit. The Department of Justice’s Office on Juvenile Justice and Delinquency Programs (OJJDP) and Office on Violence Against Women (OVW) made the final selections.
In addition to the Youth Summit this week, Attorney General Eric Holder, thirty U.S. Attorneys and other administration officials will visit Rapid City and Pine Ridge Reservation, S.D., to engage in listening sessions with tribal leaders and hear from advocates in the fields of tribal safety and domestic violence. Attorney General Holder will also participate in a special wreath laying ceremony at Wounded Knee.
Deputy Attorney General James Cole Appoints Stuart M. Goldberg as Principal Associate Deputy Attorney General and David A. O’Neil as Chief of StaffRead the Press Release
WASHINGTON – Deputy Attorney General James Cole today announced the appointment of Stuart M. Goldberg as the Principal Associate Deputy Attorney General and David A. O’Neil as the Chief of Staff to the Deputy Attorney General.
“Stuart and David have shown remarkable leadership during their time at the Department and I am grateful they are continuing their service in these two critical positions,” said Deputy Attorney General Cole. “David and Stuart are both exceptional public servants, whose dedication, sound judgment and integrity will help to lead the Office of the Deputy Attorney General and best serve the interests of the American public.”
Since 2010, Goldberg has served as the Chief of Staff to the Deputy Attorney General. From 2005 to 2010, Goldberg was the First Assistant U.S. Attorney for the District of Maryland, where he supervised the work of over 85 Assistant U.S. Attorneys involved in criminal prosecutions and civil litigation. In December 2010, he was awarded a Director’s Award for his superior performance as a manager at the 2010 Executive Office for U.S. Attorneys Director’s Awards ceremony.
Prior to joining the U.S. Attorney’s Office, Goldberg was Principal Deputy Chief of the Public Integrity Section, the office that oversees the federal effort to combat corruption through the prosecution of officials and employees at all levels of government. Goldberg began his career with the department as a trial attorney at Public Integrity in 1988. He also served the section as Deputy Chief for Litigation and Senior Litigation Counsel.
Before joining the department, Goldberg worked as a civil litigator at Rogers & Wells LLP, focusing largely on securities and commodities fraud, First Amendment and antitrust cases.
Goldberg has been a member of the adjunct faculty at Georgetown University Law Center, teaching courses on professional responsibility. He received his J.D. from Harvard Law School and his B.A. from the University of Virginia.
O’Neil has served as Associate Deputy Attorney General since 2010, advising the Deputy Attorney General on national security investigations, prosecutions and policy matters. Prior to joining the Deputy Attorney General’s Office, O’Neil was an Assistant to the Solicitor General, where he argued several cases before the Supreme Court. From 2006 to 2009, O’Neil served as an Assistant U.S. Attorney in the Southern District of New York, handling a wide variety of criminal cases and focusing primarily on international trafficking and terrorism prosecutions.
Before joining the department, O’Neil worked at the law firm of WilmerHale, where his practice involved white-collar criminal, appellate and governmental affairs litigation. He has also taught courses as an adjunct associate professor at Fordham Law School.
O’Neil clerked for Justice Ruth Bader Ginsburg and the Honorable Robert D. Sack of the U.S. Court of Appeals for the Second Circuit. He earned his J.D. from Harvard Law School and his B.A. from Princeton University.
Department of Justice and Federal Trade Commission Sign Antitrust Memorandum of Understanding with Chinese Antitrust AgenciesRead the Press Release
WASHINGTON – Assistant Attorney General Christine Varney of the Department of Justice’s Antitrust Division and Federal Trade Commission (FTC) Chairman Jon Leibowitz today signed an antitrust memorandum of understanding (MOU) with China’s three antitrust agencies to promote communication and cooperation among the agencies in the two countries. The MOU also was signed by Gao Hucheng, China International Trade Representative and Vice Minister of the Ministry of Commerce (MOFCOM), Peng Sen, Vice Chairman of the National Development and Reform Commission (NDRC), and Zhong Youping, Vice Minister of the State Administration for Industry and Commerce (SAIC).
“Our cooperative relationship with the Ministry of Commerce, the National Development and Reform Commission and the State Administration for Industry and Commerce has steadily strengthened,” said Assistant Attorney General Varney. “This memorandum of understanding is a reflection of that relationship, and, by establishing a framework for enhanced cooperation among our agencies, the MOU also allows us to move to the next chapter in our collaboration on competition law and policy matters.”
“In the three years since China’s antimonopoly law came into effect, its enforcement agencies have risen in prominence and have quickly developed many of the important analytical techniques used by leading antitrust agencies around the world,” FTC Chairman Leibowitz said. “We look forward to continuing to share our experiences with China’s enforcement agencies as they confront many of the same challenges in implementing their laws that other agencies have faced, and we are confident that China will continue to build its agencies and enforcement mechanisms in positive ways.”
The MOU provides for periodic high-level consultations among all five agencies as well as separate communications between individual agencies. It also lists several specific avenues for cooperation, including:
- Exchanges of information and advice about competition law enforcement and policy developments;
- Training programs, workshops and other means to enhance agency effectiveness;
- Providing comments on proposed laws, regulations and guidelines; and
- Cooperation on specific cases or investigations, when in the investigating agencies’ common interest.
The MOU will not change existing law in either country. China enacted its antimonopoly law in 2007, and the antimonopoly law took effect on Aug. 1, 2008. China’s antimonopoly law enforcement responsibility is divided among three agencies: MOFCOM, which handles review of mergers and acquisitions; NDRC, which enforces the law against price-related anticompetitive conduct; and SAIC, which is responsible for non-price-related anticompetitive conduct.
26 July 2011
U.S. Government Intervenes in False Claims Lawsuit Against Nurses’ Registry and Home Health CorporationRead the Press Release
WASHINGTON – The United States has intervened in a lawsuit against Nurses’ Registry and Home Health Corporation in the U.S. District Court for the Eastern District of Kentucky, the Justice Department announced today. The lawsuit was filed in March 2008 by two former Nurses’ Registry employees, Alicia Robinson-Hill and David Price, and alleges among other things that Nurses’ Registry made false claims to Medicare for medically unnecessary home health services.
According to the complaint, Nurses’ Registry exaggerated the medical conditions and needs of its patients for home health care services, both at the start of service and for additional and continuing care, in order to qualify for, and artificially increase, its claims to Medicare. The Lexington, Ky., company, according to its website “provides a wide range of home health care services including skilled nursing, physical and occupational therapies, in-home IV therapy, homemaker aid (bathing, dressing, grooming), and private duty.”
The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the United States and share in any recovery. The False Claims Act permits the government to recover three times its damages, plus civil penalties. The government has asked the court for 45 days to file its own complaint stating the United States’ allegations.
“Home health care providers furnish essential services to some of our most vulnerable citizens,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “Those who misstate the conditions of their patients for their own financial gain erode the integrity of the health care system, and they do it at taxpayers’ expense.”
“This complaint alleges serious and extensive health care fraud,” said Kerry Harvey, U.S. Attorney for the Eastern District of Kentucky. “Our office is committed to rooting out such fraud, and after investigating the allegations we concluded that it was appropriate to pursue these claims in court.”
This intervention decision is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.9 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than
$7.5 billion.
Two Brooklyn, N.Y., Pharmacists Charged in $3 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – Two defendants who co-owned and operated two Brooklyn,N.Y.,-area pharmacies were arrested today on health care fraud charges for their alleged participation in a scheme to defraud Medicare Part D that resulted in more than $3 million in fraudulent billings, announced the Department of Justice, FBI and the Department of Health and Human Services (HHS) and its Office of Inspector General (OIG).
Luba Balyasny, 46, and Alla Shrayber, 40, are each charged with conspiracy to commit health care fraud in a criminal complaint unsealed today in the Eastern District of New York. Balyasny and Shrayber, both of Brooklyn, are licensed pharmacists in New York State who co-owned and operated Monica’s Pharmacy and L & A Pharmacy.
According to court documents, from January 2007 through December 2009, Balyasny and Shrayber allegedly defrauded the Medicare Part D program by systematically submitting false claims through their pharmacies for certain prescription medications that were not purchased by their businesses and were never dispensed to Medicare beneficiaries. The complaint alleges that the inventory at both pharmacies for certain prescription medications did not match the pharmacies’ Part D reimbursement claims. According to court documents, the pharmacies submitted prescription drug claims totaling approximately 869,698 units of prescription medications without any supporting drug purchase invoices. The shortfall allegedly resulted in approximately $3 million in false and fraudulent claims paid by Medicare Part D, Part D Plans and beneficiaries for prescription drugs that were never purchased or dispensed.
If convicted, Balyasny and Shrayber face a maximum sentence of 10 years in federal prison. A complaint merely contains allegations and defendants are presumed innocent unless and until proven guilty at trial.
Today’s charges were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director-in-Charge Janice K. Fedarcyk of the FBI’s New York field office and Special Agent-in-Charge Thomas O’Donnell of the HHS-OIG.
The case is being prosecuted by Trial Attorney James Hayes of the Criminal Division’s Fraud Section. HHS-OIG and FBI conducted the investigation.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Seventh Individual Sentenced in Connection with Costa Rica-Based Business Opportunity Fraud VenturesRead the Press Release
WASHINGTON – Sirtaj Mathauda, a former resident of South Florida, was sentenced today in connection with a series of Costa Rica-based business opportunity fraud ventures, the Justice Department and the U.S. Postal Inspection Service announced. Mathauda was sentenced by U.S. District Judge Joan A. Lenard in Miami to 252 months in prison and five years supervised release.
A jury in Miami found Mathauda guilty of conspiracy, mail fraud and wire fraud following a two-week trial in late April. Evidence at trial showed that Mathauda was one of the managers of a scheme involving fraudulent companies known as Apex Management Group, USA Beverages Inc., Omega Business Systems and Nation West Distribution. The companies operated telemarketing rooms in Costa Rica from which Mathauda and his co-conspirators sold phony vending machine, coffee and greeting card distribution routes to Americans who wanted to own small businesses. Many victims paid $10,000 or more for the purported business opportunities, but received little or nothing valuable in return. At sentencing, the court found that Mathauda and his partners bilked victims between 2004 and 2009 out of more than $2.5 million.
Mathauda is one of eight men who have been indicted in three related cases in the Southern District of Florida involving fraudulent business opportunities based in Costa Rica. In addition to Apex Management, USA Beverages, Omega Business Systems and Nation West, other phony business opportunities were known as Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc. and Powerbrands Distributing Company. Six of the defendants – Stephen Schultz, Dilraj Mathauda, Donald Williams, Silvio Carrano, Gregory Fleming and Patrick Williams – previously pleaded guilty and were sentenced to significant prison terms. Jeffrey Pearson, who is alleged to have been involved in many of the fraudulent business opportunities, remains in custody in Costa Rica. The United States continues to seek his extradition.
Testimony at Mathauda’s trial showed that salesmen at the companies read scripts full of false claims to potential customers. Co-conspirators also played the role of “locators,” who lied to victims about supposedly profitable locations for the distribution routes. Some of the same salesmen who pitched customers also made phony reference calls in which they pretended to be satisfied purchasers of the business opportunities.
Evidence at trial demonstrated that each company operated for several months before closing and leaving victims with no recourse. Soon after one company closed, the next opened as the scheme repeated itself. The various companies used bank accounts, office space and other services in Florida and elsewhere to make it appear as though they were located in the United States. In reality, the companies were mostly operated from phone rooms in Costa Rica. The co-conspirators transferred money paid by victims to bank accounts in Costa Rica and elsewhere.
“Business opportunity fraud causes serious harm to victims who are trying to start an honest business and earn a living,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “The court’s stiff sentence – over 20 years in prison for this defendant – sends a strong message to those who seek to exploit consumers to make a quick buck for themselves.”
“Fraudulent business opportunity sellers must realize that all financial fraud will be prosecuted vigorously. This is true even if the schemers operate from outside of the United States,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “International law enforcement cooperation eliminates safe havens for those who seek to commit fraud from overseas.”
“Telemarketers engaged in fraud using the U.S. Mail and overnight delivery services will be investigated thoroughly no matter where they attempt to hide. This international and domestic investigation illustrates the Postal Inspection Service’s resolve to protect the American public from financial fraud in all its forms,” said Henry Gutierrez, U. S. Postal Inspector in Charge in Miami.
Assistant Attorney General West and U.S. Attorney Ferrer commended the investigative efforts of the Postal Inspection Service, and the Federal Trade Commission, which previously brought a related civil suit and made a criminal referral. The case was prosecuted by trial attorneys Jeffrey Steger and Alan Phelps of the U.S. Department of Justice Office of Consumer Protection Litigation.
Phoenix Men Convicted in Money Laundering and Tax SchemeRead the Press Release
WASHINGTON-- Gino Carlucci and Wayne Mounts, both residents of Arizona, have been convicted of conspiracy to commit money laundering and conspiracy to defraud the Internal Revenue Service (IRS), the Department of Justice and IRS announced today. A federal jury also convicted Carlucci for filing a false income tax return in 2004. The jury returned a not guilty verdict for Carlucci on a separate witness tampering charge. The verdict came following an eight day trial before Chief Judge Kathryn H. Vratil of the District of Kansas, sitting by special designation in Phoenix.
Carlucci and Mounts were indicted by a federal grand jury in April 2010. According to the evidence presented at trial, Carlucci and Mounts devised several false schemes to defraud Joseph Flickinger, a tax return preparer, and Flickinger’s taxpayer and investment clients out of funds and assets. Flickinger himself had been running a Ponzi-type scheme in which he defrauded his investment clients of their life savings. At the time of Carlucci and Mounts’s fraud, Flickinger was under indictment in the Southern District of Ohio on tax fraud charges.
As established at trial, Carlucci and Mounts’s false schemes included a purported investment in a fraudulent casino project in Antigua. In addition, at the time of the charged conduct, the Securities and Exchange Commission (SEC) had frozen all of Carlucci’s assets due to his involvement in a civil securities matter in Utah. Carlucci and Mounts’s second scheme involved defrauding Flickinger and others of money that was supposedly going to be used to pay Carlucci’s SEC penalty. Carlucci and Mounts had a third scheme which involved helping Flickinger hide from the government monies that he had defrauded from his own investment clients, in part by Carlcucci and Mounts promising to wire the funds through a series of accounts in the Caribbean so that the funds could not be traced or seized by the government.
The evidence at trial established that after getting the last of Flickinger’s funds, Carlucci set Flickinger up to be arrested by assisting him in arranging a private jet to flee to Antigua, where Flickinger believed the funds were hidden. Instead, Carlucci anonymously tipped off the
government to the scheme, causing Flickinger to be arrested. Carlucci and Mounts then used the money for their own personal benefit by withdrawing cash in structured amounts and transferring cashier’s checks and wire transfers to nominee accounts for their own benefit. In addition, Carlucci and Mounts spent over $150,000 of the funds to buy a 43-foot luxury boat that Carlucci later concealed from the government for over two years. Despite personally benefitting from the money in 2004, Carlucci signed and filed a false individual income tax return that failed to report any of the money he got in the scheme, and instead reported that he was due a refund due to the Earned Income tax credit. The evidence showed that the government located and seized the boat, which was being hidden at an associate’s home in Phoenix, in 2007.
Chief Judge Vratil remanded both Carlucci and Mounts into custody pending their Oct. 3, 2011, sentencing. Carlucci and Mounts each face a maximum sentence of 20 years in prison for the conspiracy to commit money laundering conviction and a maximum sentence of five years in prison for the conspiracy to defraud the IRS conviction. Carlucci also faces an additional three years on the false return conviction.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax/.
John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division, commended the special agents from the IRS Criminal Investigation Division who investigated the case as well as Tax Division attorneys Richard Rolwing, Hayden Brockett and Monica Edelstein who prosecuted the case. Principal Deputy Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office for the District of Arizona for their assistance in this matter.
Justice Department Signs Agreements in Massachusetts, Kentucky and Indiana to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced agreements with Norfolk County, Mass.; Daviess County, Ky.; and the city of Madison, Indiana, to improve access to all aspects of civic life for individuals with disabilities. The agreements were reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA). The department has now reached 193 agreements under the PCA initiative.
“More than twenty years after the ADA became law, the Justice Department continues its vigilant efforts to ensure nationwide compliance with the ADA, which guarantees equal access for individuals with disabilities in our 21st century society,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend the officials in Norfolk County, Daviess County and the city of Madison for making this commitment to provide equal access to their residents and visitors with disabilities. These agreements, signed on the 21st anniversary of the ADA, represent another significant step towards the Justice Department’s goal of nationwide compliance with the ADA.”
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements.
The agreements are tailored to address the steps each community must take to improve access. PCA agreements typically include requirements to make physical modifications to public facilities so that, among other elements, parking, routes into the buildings, entrances, assembly areas, restrooms, service counters and drinking fountains are accessible to people with disabilities. Other common provisions address effective communication (e.g., website and telephone communications), grievance procedures, polling places, emergency management procedures and policies, sidewalks, and domestic violence programs. For specific information about the provisions included in each of the agreements reached today, see the fact sheets accompanying this release.
According to census data, more than 89,000 residents in Norfolk County, or 15 percent of residents, have a disability. More than 21 percent of residents in Daviess County, or 18,166, have a disability, and more than 21 percent of residents of the city of Madison, or 2,297, have a disability.
Today’s agreements were reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreements will remain in effect for three years from July 26, 2011. The department will actively monitor compliance with the agreements until it has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreements, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA webstite www.ada.gov or call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
The agreement with Norfolk County is available at www.ada.gov/norfolk_pca/norfolk_sa.htm; the agreement with Daviess County is available at www.ada.gov/daviess_co_pca/daviess_sa.htm; and the agreement with Madison is available at www.ada.gov/madison_pca/madison.htm.
Former Tuscaloosa County, Alabama, Sheriff’s Sergeant Charged with Civil Rights ViolationsRead the Press Release
WASHINGTON – The Justice Department announced today that a federal grand jury in Birmingham, Ala., returned a three-count indictment charging former Tuscaloosa Sheriff’s sergeant, Althea Mallisham, 52, with federal civil rights crimes for using a stun gun on three jail detainees in 2008.
Mallisham is charged with violating the constitutional rights of three jail detainees by using a stun gun to illegally punish the detainees during separate incidents over a four month period in 2008. The indictment alleges that each of the three detainees suffered bodily injury as a result of Mallisham’s use of the stun gun against them.
Mallisham faces a maximum sentence of 10 years in prison and a fine of $250,000 on each count.
This case, which is ongoing, is being investigated by the Tuscaloosa resident agency of the FBI’s Birmingham Field Office, and is being prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Tamarra Matthews Johnson for the Northern District of Alabama.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Former Northern Virginia Resident Pleads Guilty to Tax Evasion and Impeding the Internal Revenue ServiceRead the Press Release
WASHINGTON – Thomas J. Ernst, formerly a resident of McLean and Arlington, Va., pleaded guilty to one count of corruptly endeavoring to impede and impair the Internal Revenue Service (IRS) and one count of tax evasion for 2005, the Department of Justice and IRS announced today. According to the plea agreement, the tax loss exceeds $2.5 million.
According to court documents, between 2000 and 2006, Ernst served as the president and chief executive officer of Medicure Plus Inc., a health insurance benefits administration company. Medicure operated as a third-party administrator of the Postmasters’ Benefits Plan (PBP), the health benefits carrier for the National League of Postmasters (NLP). Medicure and NLP entered into a 10 year guaranty agreement under which Medicure managed PBP’s operations; NLP paid Medicure $166,000 each months plus a $33,000 administrative fee.
According to the plea agreement and statement of facts, Ernst admitted that between 2001 and 2007, he corruptly endeavored to obstruct and impede the due administration of the Internal Revenue laws by causing Medicure to make payments from its corporate bank account for numerous personal expenses, including, a summer rental house, more than $1.5 million in payments to himself, his wife, his sister-in-law and his sons, his son’s Georgetown University college education and various property purchases and rentals. In all, these payments totaled more than $3.3 million. Additionally, Ernst admitted that he used nominee bank accounts, purchased and leased assets in the names of his sons and sister-in-law and created fictitious documents to conceal his income and ownership of assets from the IRS. In addition, Ernst admitted that he caused Medicure to fail to file corporate income tax returns, despite Medicure earning more than $11 million in gross income between 2001 and 2006.
According to court documents, Ernst also admitted that between 2001 and 2006, he failed to file a U.S. Income Tax Return, Form 1040 with the IRS, despite the fact that he was required to do so by law. Ernst specifically admitted that in 2005 he received taxable income of at least $915,678, upon which a substantial tax was due and owing. In an attempt to evade and defeat the assessment and payment of this tax, he admitted to failing to file an income tax return by April 17, 2006, and by, among other things, using nominee bank accounts and his family members to conceal his income from the IRS.
Ernst faces up to three years in prison and a $250,000 fine for the corruptly endeavoring to impede and impair the IRS conviction and up to five years in prison and a $250,000 for the tax evasion conviction. U.S. District Court Judge Claude M. Hilton of the Eastern District of Virginia scheduled sentencing for Dec. 16, 2011.
The case was investigated by the IRS-Criminal Investigation Division and prosecuted by the Justice Department’s Tax Division Trial Attorneys Caryn Finley and Thomas Krepp, and Assistant U.S. Attorney Charles Connolly of the Eastern District of Virginia.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Chevron Puerto Rico LLC acepta mejorar la detección de fugas en las estaciones de servicio de Puerto RicoRead the Press Release
WASHINGTON - Un acuerdo conciliatorio anunciado hoy entre los Estados Unidos y Chevron Puerto Rico LLC resuelve violaciones de la Ley de Recuperación de la Conservación de Recursos [Resource Conservation Recovery Act (RCRA)] en aproximadamente 100 de las instalaciones de tanques de almacenaje subterráneos en Puerto Rico. Según los términos del acuerdo, Chevron ha aceptado gastar aproximadamente $5.2 millones de dólares en mejorar sus métodos de detección de fugas y operaciones en estas estaciones de propiedad de Chevron que llevan la marca "Texaco", y pagará una multa de $600,000.
Las fugas de petróleo de tanques de almacenaje subterráneos pueden contaminar el agua, haciendo con que no sea potable, presentan peligro de incendio y explosión, y pueden tener efectos de corto y largo plazo en la salud de las personas. Las normas de la Agencia de Protección Ambiental [Environmental Protection Agency (EPA)] exigen que los propietarios y operadores mantengan tanques de almacenaje subterráneos para evitar las fugas al medio ambiente. Además, las normas exigen que los propietarios y operadores limpien las fugas para restaurar y proteger los recursos de agua subterránea, y proveer un ambiente seguro para las personas que vivan o trabajen en las proximidades de estas instalaciones.
La demanda presentada ayer por los Estados Unidos contra Chevron alegan las siguientes omisiones: brindar detección de fugas para tanques y tuberías, proveer equipos de protección contra sobrellenado apropiados, realizar pruebas anuales en sistemas automáticos de detección de fugas en línea y mantener registros adecuados de la detección de fugas para tanques y tuberías.
"Para identificar fugas actuales o potenciales, Chevron instalará sistemas avanzados de detección de fugas, monitoreo y alarma que mejorarán el tiempo de respuesta y ayudarán a prevenir la contaminación del agua subterránea en Puerto Rico", dijo Ignacia S. Moreno, Secretaria de Justicia Auxiliar del Departamento de Medio Ambiente y Recursos Naturales. "Esta solución de vanguardia para todo el sistema debe servir de modelo para los propietarios y operadores de tanques de almacenaje subterráneos".
"Según los términos de este acuerdo, se protegerá mejor la salud de las personas que viven en comunidades de todo Puerto Rico contra el peligro de la contaminación del agua subterránea debido a potenciales fugas de tanques subterráneos", dijo la Administradora Regional de la EPA Judith A. Enck. "Espero que otros propietarios de tanques de almacenaje subterráneos en todo el estado trabajen en el mantenimiento de sus tanques subterráneos a fin de prevenir futuras fugas".
Según el acuerdo, Chevron instalará sistemas de detección de fugas Veeder-Root totalmente automatizados en los tanques de almacenaje subterráneos de todas sus instalaciones en Puerto Rico antes del 31 de marzo de 2013, y seguirá operando estos sistemas en sus instalaciones por un mínimo de cinco años. Este sistema automatizado que detecta contaminantes antes de que ingresen al medio ambiente, brinda un método más protector de detección de fugas que otros métodos, tales como el monitoreo del agua subterránea o de vapor empleado actualmente por Chevron. Chevron estima que los sistemas automatizados costarán aproximadamente 1.8 millones de dólares. Además, Chevron presentará informes trimestrales a la EPA sobre su uso de estos sistemas, y deberá brindar información sobre el uso de los sistemas por Chevron a pedido de la EPA.
Asimismo, Chevron ha acordado implementar dos proyectos ambientales complementarios. El primero requiere la instalación por Chevron de un sistema de monitoreo centralizado en aproximadamente 155 estaciones de servicio "Texaco" de Chevron que contienen tanques de almacenaje subterráneos hasta el 31 de marzo de 2013. El sistema de monitoreo contendrá alarmas audibles y visibles que alertarán al personal de la estación sobre la presencia de fugas y otros hechos potencialmente peligrosos. El segundo requiere la instalación por Chevron de sensores de líquido bajo bandejas de surtidores en todas sus instalaciones hasta el 31 de marzo de 2013, así como la conexión de estos sensores a un sistema de monitoreo centralizado. Ambos proyectos ambientales complementarios requieren informes periódicos por parte de Chevron a la EPA. Juntos, los dos proyectos le costarán aproximadamente 3.4 millones de dólares a Chevron.
La RCRA le brinda a la EPA la autoridad de controlar residuos peligrosos del principio al fin. Esto incluye la generación, el transporte, el tratamiento, el almacenaje y la eliminación de residuos peligrosos. Las enmiendas de 1986 a la RCRA permiten a la EPA ocuparse de los problemas ambientales que podrían surgir a partir del almacenaje de petróleo y otras sustancias peligrosas en tanques subterráneos.
Para obtener más información sobre tanques de almacenaje subterráneos, visite www.epa.gov/oust.
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Chevron Puerto Rico LLC Agrees to Improve Leak Detection at Puerto Rico Gas StationsRead the Press Release
WASHINGTON – A settlement announced today between the United States and Chevron Puerto Rico LLC resolves Resource Conservation Recovery Act (RCRA) violations at approximately 100 of Chevron’s underground storage tank facilities in Puerto Rico. Under the terms of the settlement, Chevron has agreed to spend approximately $5.2 million to improve its leak detection methods and operations at these Chevron-owned, “Texaco” branded service stations, and will pay a $600,000 penalty.
Petroleum releases from underground storage tanks can contaminate water, making it unsafe to drink, pose fire and explosion hazards, and can have short and long-term effects on people’s health. Environmental Protection Agency (EPA) regulations require owners and operators to maintain underground storage tanks to avoid releases into the environment. In addition, the regulations require owners and operators to clean up leaks to restore and protect ground water resources, and provide a safe environment for those who live or work around these sites.
Among the violations alleged in the complaint filed yesterday by the United States against Chevron were failure to: provide release detection for tanks and piping, provide adequate overfill protection equipment, perform annual tests of automatic line leak detector systems and maintain adequate records of release detection for tanks and piping.
“To identify potential or actual leaks, Chevron will install advanced leak detection, monitoring and alarm systems that will improve response time and help prevent the contamination of groundwater in Puerto Rico,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division. “This state of the art, system-wide solution should serve as a model for owners and operators of underground storage tanks.”
“Under the terms of this agreement, the health of people living in communities across Puerto Rico will be better protected from the threat of ground water contamination due to potential leaking underground tanks,” said EPA Regional Administrator Judith A. Enck. “I am hopeful that other owners of underground storage tanks throughout the Commonwealth will work to maintain their underground tanks to prevent future leaks.”
Under the settlement, Chevron will install fully automated Veeder-Root leak detection systems on underground storage tanks at all of its Puerto Rico facilities by March 31, 2013, and will continue operating these systems at its facilities for a minimum of five years. This automated system, which detects contaminants before they enter the environment, provides a more protective method of release detection than other methods, such as the ground water or vapor monitoring currently employed by Chevron. Chevron estimates that the automated systems will cost approximately $1.8 million. In addition, Chevron will provide quarterly reports to EPA regarding its operation of these systems, and will be required to provide information regarding Chevron’s operation of the systems upon EPA’s request.
Chevron has further agreed to implement two supplemental environmental projects. The first requires Chevron to install a centralized monitoring system at approximately 155 Chevron owned, “Texaco” branded service stations containing underground storage tanks by March 31, 2013. This monitoring system will contain audible and visible alarms that will alert station personnel of leaks and other potentially dangerous events. The second requires Chevron to install liquid sensors under dispenser pans for all of its facilities by March 31, 2013, and to also connect these sensors to a centralized monitoring system. Both supplemental environmental projects require regular reporting by Chevron to EPA. Combined, the two projects will cost Chevron approximately $3.4 million.
RCRA gives EPA the authority to control hazardous waste from the “cradle-to-grave.” This includes the generation, transportation, treatment, storage and disposal of hazardous waste. The 1986 amendments to RCRA enabled EPA to address environmental problems that could result from underground tanks storing petroleum and other hazardous substances.
For more information on underground storage tanks, visit www.epa.gov/oust.
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Alabama Man Indicted for Lacey Act Wildlife CrimesRead the Press Release
WASHINGTON – A Scottsboro, Ala., man was indicted today for the illegal possession, transportation and sale of protected reptiles in violation of the Lacey Act, announced Ignacia S. Moreno Assistant Attorney General for the Justice Department’ s Environmental & Natural Resources Division and Joyce White Vance, U.S. Attorney for the Northern District of Alabama.
David Langella, 43, a resident of Scottsboro, traveled to Arizona for the past six years to hunt and capture Arizona state protected reptiles. According to the felony and misdemeanor charges filed in federal court, Langella conspired with others to violate the Lacey Act, as well as Arizona and Alabama state laws. Langella transported some of the illegally captured reptiles back to Scottsboro for his own collection and some were distributed to others. In addition, Langella provided guiding services to others for the capture of Arizona protected reptiles.
According to the indictment filed in federal court:
In 2009, Langella traveled to Arizona where he provided guiding services to others for the capture of Gila monsters and Ridge nosed rattle snakes. Arizona state law prohibits the hunting and capture of both reptiles.
In 2009, Langella facilitated the transportation of non-indigenous poisonous reptiles into and out of Alabama in violation of Alabama law.
In 2009, Langella attempted to obstruct law enforcement officials in Alabama by concealing illegally obtained reptiles.
In 2006, Langella shipped illegally captured protected reptiles to Alabama using false shipping labels.
In 2008, Langella captures protected reptiles in Arizona and transported them back to Alabama in violation of Arizona and Alabama state laws.
The Lacey Act is a federal wildlife law which makes it unlawful to transport, sell, receive, acquire or purchase wildlife which was taken, transported, possessed or sold in violation of state, federal or Indian tribal laws or regulations.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The investigation was conducted by agents with the U.S. Fish and Wildlife Service, Office of Law Enforcement and the Alabama Wildlife and Freshwater Fisheries Division, Special Operations Unit. The case is being prosecuted by the Office of U.S. Attorney Joyce Vance White, Northern District of Alabama, in conjunction with the Environmental Crimes Section of the U.S. Department of Justice, Environment and Natural Resources Division.
25 July 2011
Departments of Justice, Homeland Security and Labor Announce Selection of Anti-Trafficking Coordination TeamsRead the Press Release
WASHINGTON – The Departments of Justice, Homeland Security and Labor announced today the selection of Pilot Anti-Trafficking Coordination Teams (ACTeams) as part of a nationwide Human Trafficking Enhanced Enforcement Initiative designed to better coordinate federal criminal investigations and prosecutions of human trafficking offenses.
The Phase I Pilot ACTeams will be based in Atlanta; El Paso, Texas; Kansas City, Mo.; Los Angeles; Memphis, Tenn.; and Miami, under the leadership of the local U.S. Attorney and the highest-ranking federal investigative agents from the relevant regional FBI, U.S. Immigration and Customs Enforcement (ICE) and Department of Labor field offices.
The announcement today follows the conclusion of a competitive, interagency selection process led by the Federal Enforcement Working Group, a collaboration of the Justice Department’s Human Trafficking Prosecution Unit, Executive Office of U.S. Attorneys and FBI; the Department of Homeland Security’s ICE Human Smuggling and Trafficking Unit; and the Department of Labor’s Wage and Hour Division and Office of the Inspector General.
On Feb. 1, 2011, Attorney General Eric Holder, Secretary of Homeland Security Janet Napolitano and Secretary of Labor Hilda Solis jointly announced the launch of the ACTeam Initiative and the commencement of the competitive interagency selection process.
Each ACTeam, which is comprised of federal prosecutors and federal agents from the participating federal enforcement agencies, will implement a law enforcement strategic action plan to combat identified human trafficking threats. The ACTeams will focus on developing federal criminal human trafficking investigations and prosecutions to protect the rights of human trafficking victims, bringing traffickers to justice and dismantling human trafficking networks.
Attorney General Holder, Secretary Napolitano and Secretary Solis have each declared the fight against human trafficking to be a top priority, and have committed to collaborating with federal, state, local and international law enforcement agencies, and other governmental and non-governmental partners to further enhance their anti-trafficking efforts.
Arkansas Man Pleads Guilty to Federal Hate Crime for Cross BurningRead the Press Release
WASHINGTON –Curtis Coffee, 19, of Salado, Ark., pleaded guilty today to criminal violations of housing rights related to his role in the Aug. 28, 2010, cross burning in front of an African-American man’s apartment in Salado, the Department of Justice announced.
Coffee, along with co-defendants, Tony Branscum, 25, and Bradley Branscum, 23, also of Salado, were indicted in November 2010, by a federal grand jury on civil rights charges and other related federal charges stemming from their participation in the cross burning. Tony and Bradley Branscum, who are cousins, pleaded guilty last week for their roles in the cross burning.
Coffee admitted in court that on the night of Aug. 28, 2010, he, along with his co-defendants, devised a plan to burn a cross in the yard of an African-American in the Salado community. Thereafter, Tony Branscum constructed a wooden cross in a workshop behind his house. The men then covered the cross in gasoline-soaked clothing and Brad Branscum drove them and the cross to the victim’s residence. Upon arriving at the residence, Coffee propped up the cross on a satellite dish and ignited it.
“The burning cross is an unmistakable symbol of bigotry and hate, and to use it to threaten a person with violence because of his race is intolerable in this nation,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will continue to aggressively prosecute hate crimes of this kind.”
Coffee faces up to 10 years in prison and fines of up to $250,000.
This case was investigated by the Little Rock, Ark., Division of the FBI and is being prosecuted by Assistant U.S. Attorney John Ray White of the Eastern District of Arkansas and Trial Attorneys Cindy Chung and Henry Leventis of the Civil Rights Division.
22 July 2011
Hacker Sentenced in Virginia to 10 Years in Prison for Stealing <br /> 675,000 Credit Card Numbers Leading to $36 Million in LossesRead the Press Release
WASHINGTON – Rogelio Hackett Jr., 25, of Lithonia, Ga., was sentenced today to 120 months in prison by U.S. District Judge Anthony J. Trenga in Alexandria, Va., for trafficking in counterfeit credit cards and aggravated identity theft, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
“Hacking and identity theft were a way of life for Mr. Hackett,” said Assistant Attorney General Breuer. “For years, he used the Internet to steal and sell identities to further a multi-million dollar fraud. Identity theft has devastating effects on consumers and businesses alike, and we will continue to be aggressive in pursuing this pernicious criminal activity.”
“Mr. Hackett was in the business of hacking for profit and committed identity theft on a massive scale,” said U.S. Attorney MacBride. “He was a full-time identity thief who expanded his business worldwide, affecting hundreds of thousands of people, banks and merchants. Today’s sentence and substantial fine should serve as a strong deterrent to others who may be tempted to engage in identity theft.”
Hackett pleaded guilty on April 21, 2011. At today’s sentencing, he was also ordered to pay a $100,000 fine. According to court documents, U.S. Secret Service special agents executing a search warrant in 2009 at Hackett’s home found more than 675,000 stolen credit card numbers and related information in his computers and email accounts. Hackett admitted in a court filing that since at least 2002, he has been trafficking in credit card information he obtained either by hacking into business computer networks and downloading credit card databases, or by purchasing the information from others using the Internet through various “carding forums.” These forums are online discussion groups used by “carders” to traffic in credit card and other personal identifying information.
Hackett also admitted that he sold credit card information, manufactured and sold counterfeit plastic cards, and used the credit card information to acquire gift cards and merchandise. According to court documents, credit card companies have identified tens of thousands of fraudulent transactions using the card numbers found in Hackett’s possession, totalling more than $36 million.
The case was investigated by the U.S. Secret Service and prosecuted by Michael J. Stawasz, a Senior Counsel for the Computer Crime and Intellectual Property Section of the Justice Department’s Criminal Division and a Special Assistant U.S. Attorney for the Eastern District of Virginia.
Five Employees of A&O Entities Sentenced to Prison for<br /> $100 Million Fraud SchemeRead the Press Release
WASHINGTON – Five employees for A&O Resource Management Ltd. and various related entities – including two executives – were sentenced today for their roles in a $100 million fraud scheme with more than 800 victims across the United States and Canada.
The sentences were announced by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.
The five individuals were sentenced by U.S. District Judge Robert E. Payne. Russell E. Mackert, 52, general counsel for A&O, was sentenced to 188 months in prison; Brent Oncale, 36, former owner and founder of A&O, was sentenced to 120 months in prison; David White, 41, the former president of A&O, was sentenced to 60 months in prison; Eric M. Kurz, 47, a wholesaler of A&O investment products, was sentenced to 60 months in prison; and Tomme Bromseth, 69, an A&O sales agent in the Richmond area, was sentenced to 36 months in prison.
“The impact of this massive fraud on many of A&O’s investor victims has been disastrous,” said U.S. Attorney MacBride. “Hundreds of elderly investors invested their life savings with A&O and saw it all vanish in an instant. These investors were not looking for quick cash, just a safe alternative to invest their retirement funds. The safety, security, and no-risk nature of the investment was critical to the sales pitch, and it was all a big fat lie.”
“Brent Oncale and his co-conspirators operated a sham investment company that turned fraud and deceit into a business model,” said Assistant Attorney General Breuer. “They stole millions from hundreds of unsuspecting investors, pocketing huge sums for themselves. Today’s sentences reflect the severity of these cowardly and costly crimes.”
All five men pleaded guilty in the fall of 2010 and early 2011 for their roles in the fraud scheme at A&O, which falsely marketed life settlement products to investors, many of whom were elderly. The conspirators at A&O defrauded investors by making misrepresentations about A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds.
When state regulators began to scrutinize A&O’s investment products, conspirators manufactured a sham sales transaction to “sell” A&O to an offshore shell corporate entity named Blue Dymond and later to another offshore shell corporate entity named Physician’s Trust. However, A&O and Physician’s Trust was still secretly controlled by A&O principals and their conspirators.
On June 6, 2011, the hedge fund manager of A&O, Adley H. Abdulwahab, 35, of Houston, was convicted by a jury in Richmond, Va., of one count of conspiracy to commit mail fraud, five counts of mail fraud, one count of conspiracy to commit money laundering, five counts of money laundering and three counts of securities fraud. A founder of A&O, Christian Allmendinger, 39, was convicted by a jury on March 23, 2011, of one count of conspiracy to commit mail fraud, two counts of mail fraud, one count of conspiracy to commit money laundering, two counts of money laundering and one count of securities fraud. Abdulwahab is scheduled to be sentenced on Sept. 28, 2011, and Allmendinger is scheduled to be sentenced on Aug. 14, 2011. They face up to 20 years in prison on each count except the securities fraud counts, on which they face up to five years in prison.
This investigation was conducted by the U.S. Postal Inspection Service, Internal Revenue Service, and FBI, with significant assistance from the Texas State Securities Board and the Virginia Corporation Commission. These cases are being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg from the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr., of the Criminal Division’s Fraud Section.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
21 July 2011
“Project Delirium” Results in Nearly 2,000 Arrests During 20-Month <br /> Operation, Seizures of More Than 12 Tons of Drugs and $62 Million in U.S. CurrencyRead the Press Release
WASHINGTON – Approximately 1,985 individuals have been arrested on narcotics-related charges as part of a 20-month multi-agency law enforcement investigation known as “Project Delirium,” which targeted the La Familia Michoacana drug cartel, the Department of Justice announced today.
As part of an ongoing takedown that began June 1, 2011, 221 individuals have been arrested across the United States as part of Project Delirium, including more than 70 individuals apprehended yesterday and today. In addition, $770,499 in U.S. currency, 635 pounds of methamphetamine, 118 kilograms of cocaine and 24 pounds of heroin were seized by law enforcement agents since June 1, 2011.
“Through coordinated and strategic efforts like Project Delirium, we are disrupting the operations of Mexican drug cartels in the United States and Mexico,” said Deputy Attorney General James Cole. “Today, we see drug traffickers operating in urban and rural communities alike. The arrests and seizures we are announcing today have stripped La Familia of its manpower, its deadly product and its profit, and helped make communities large and small safer. The department is determined to continue our aggressive efforts, along with our Mexican law enforcement partners, to diminish and ultimately eliminate the threat posed by these dangerous groups.”
“Through the Secretariat of Public Security, the Government of Mexico has seen increased results in their fight against the drug trafficking organizations,” said Mexico’s Secretary of Public Security Genaro Garcia Luna. “Due to increased information sharing and collaboration with the DEA, these efforts have resulted in successful and significant arrests and seizures of drugs and money.”
“Project Delirium is the second successful, strategic and surgical strike to disrupt and destroy one of the most violent Mexican cartels, La Familia,” said Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA). “Through their violent drug trafficking activities, including their hallmark of supplying most of the methamphetamine imported into the United States, La Familia is responsible for recklessly and violently destroying countless lives on both sides of the border. The strong joint efforts with our Mexican and U.S. law enforcement partners are crippling this brutal organization by capturing its leaders, strangling its distribution networks, and relentlessly pursuing its members and those who facilitate them.”
“Law enforcement officials here in the U.S., in Mexico and all around the world are cooperating at unprecedented levels. There is a willingness - like never before - to work hand-in-hand to fight the cartels, the criminal enterprises and the violent gangs that threaten the peace and security of people on both sides of the border,” said John Morton, director of U.S. Immigration and Customs Enforcement (ICE).
“Investigations such as Project Delirium target the dangers these organizations pose to the United States and Mexico,” said Shawn Henry, FBI’s executive assistant director of the Criminal, Cyber, Response, and Services Branch. “The FBI, together with our federal and international law enforcement partners, will continue to commit our resources to combat the threat posed by transnational criminal enterprises.”
Project Delirium is the result of information gathered during the course of a previous effort targeting La Familia, known as Project Coronado. To date, Project Delirium has led to the arrest of 1,985 individuals and the seizure of approximately $62 million in U.S. currency, and approximately 2,773 pounds of methamphetamine, 2,722 kilograms of cocaine, 1,005 pounds of heroin, 14,818 pounds of marijuana and $3.8 million in other assets.
As part of Project Delirium, arrests have been made or charges have been unsealed to date in the following districts: the Northern District of Alabama; the Central, Eastern and Southern Districts of California; the District of Colorado; the District of Columbia; the Northern District of Georgia; the District of Kansas; the Eastern District of Michigan; the District of Minnesota; the Eastern District of Missouri; the District of New Mexico; the Eastern and Western Districts of North Carolina; the Western District of Tennessee; and the Northern, Southern and Western Districts of Texas. On June 21, 2011, Mexican law enforcement arrested La Familia leader and Consolidated Priority Organizational Target (CPOT) Jose de Jesus Mendez-Vargas, aka “El Chango” or “The Monkey,” based on Mexican charges.
Individuals indicted in these cases are charged with a variety of crimes, including: conspiracy to distribute methamphetamine, cocaine and marijuana; distribution of methamphetamine, cocaine and marijuana; conspiracy to import narcotics into the United States; money laundering; and other violations of federal law. Numerous defendants face forfeiture allegations as well.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigative efforts in Project Delirium were coordinated by the multi-agency Special Operations Division, comprised of agents and analysts from the DEA, FBI, ICE, Internal Revenue Service, U.S. Customs and Border Protection, U.S. Marshals Service, as well as attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section and Office of International Affairs. More than 300 federal, state, local and foreign law enforcement agencies contributed investigative and prosecutorial resources to Project Delirium through the Organized Crime Drug Enforcement Task Forces.
The department thanks the Government of Mexico and its Mexican law enforcement partners for their continued partnership and collaboration in the ongoing efforts to combat Mexican drug cartels.
Swiss International Bank's Former Head of North America Offshore Banking, Others Charged with ConspiracyRead the Press Release
WASHINGTON – Markus Walder, former head of North America Offshore Banking at an international bank headquartered in Zurich; Susanne D. Rüegg Meier, a former manager with the international bank; Andreas Bachmann, a former banker at a subsidiary of the international bank; and Josef Dörig, the founder of a Swiss trust company, have been charged with conspiring with other Swiss bankers to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced today. The four are charged in a superseding indictment together with four other defendants (Marco Parenti Adami, Emanuel Agustino, Michele Bergantino and Roger Schaerer) who were charged in an indictment returned on Feb. 23, 2011.
According to the superseding indictment, the international bank’s managers and bankers engaged in illegal cross-border banking that was designed to assist U.S. customers evade their income taxes by opening and maintaining secret bank accounts at the bank and other Swiss banks. As of the fall of 2008, the international bank maintained thousands of secret accounts for U.S. customers with as much as $3 billion in total assets under management in those accounts. The conspiracy dates back to 1953 and involved two generations of U.S. tax evaders including U.S. customers who inherited secret accounts at the international bank.
Moreover, according to the superseding indictment, the conspirators utilized a representative office in New York City to provide unlicensed and unregistered banking services to U.S. customers with undeclared accounts. Walder, Schaerer, their co-conspirators and others allegedly made false statements and provided misleading information to the Federal Reserve Bank of New York and to the IRS in order to conceal the international bank’s U.S. cross-border banking business and the role of the New York representative office in that business.
The superseding indictment alleges that Walder supervised the U.S. cross-border banking business, including the New York representative office headed by Schaerer, a Geneva-based team of bankers led by manager Marco Parenti Adami and a Zurich-based team of bankers led by manager Rüegg Meier. Rüegg Meier was a member of senior management at the international bank and also served as a private banker, providing unlicensed and unregistered banking services to U.S. customers with undeclared accounts at the bank. The superseding indictment further alleges that Bachmann was a private banker for a wholly-owned subsidiary of the international bank who traveled to the United States to assist U.S. taxpayers in evading their U.S. taxes through the use of secret bank accounts. It is further alleged that Dörig, founder of a Swiss trust company, was a preferred provider of the international bank who assisted U.S. customers in forming and maintaining nominee tax haven entities and opening secret accounts at the international bank and its subsidiaries in the names of the entities.
According to the superseding indictment, the defendants and their co-conspirators solicited U.S. customers to open secret accounts because Swiss bank secrecy would permit them to conceal from the IRS their ownership of accounts at the international bank and other Swiss banks. It is further alleged that they provided unlicensed and unregistered banking services and investment advice to customers in the United States in person while on travel to the United States, including at the international bank’s representative office in New York City and by mailings, email and telephone calls to and from the United States. It is further alleged that the international bank’s employees destroyed statements and other account records that were sent via email or facsimile to the representative office in New York so that records regarding the undeclared accounts would not be maintained in the United States.
The superseding indictment alleges that the defendants and their co-conspirators caused U.S. customers to travel outside the United States to conduct banking related to their secret accounts; opened secret accounts in the names of nominee tax haven entities for U.S. customers; accepted IRS forms that falsely stated under penalties of perjury that the owners of the secret accounts were not subject to U.S. taxation; advised and caused United States customers to structure withdrawals from their secret accounts in amounts less than $10,000 in an attempt to conceal the secret accounts and the transactions from American authorities; mailed bank checks in amounts less than $10,000 to customers in the United States; and advised U.S. customers to utilize offshore charge, credit and debit cards linked to their secret accounts and provided the customers with such cards, including cards issued by American Express, Visa and Maestro.
According to the superseding indictment, after the bank decided to close the secret accounts maintained by U.S. customers, the defendants encouraged and assisted U.S. customers to transfer their secret accounts to other foreign banks as a means of continuing to hide their assets from the IRS and discouraged the customers from disclosing their secret accounts to the IRS through the IRS’s Voluntary Disclosure Program.
Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Douglas H. Shulman, Commissioner of the IRS, made the announcement.
A criminal indictment is only an accusation and a defendant is presumed innocent until proven guilty. If convicted, the defendants each face a maximum of five years in prison and a maximum fine of $250,000.
U.S. Attorney MacBride and Principal Deputy Assistant Attorney General DiCicco commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsels Kevin M. Downing and John E. Sullivan and Trial Attorneys Mark F. Daly, Tino M. Lisella, Michelle M. Petersen and Melissa Siskind of the Tax Division, and Assistant U.S. Attorney Mark Lytle, who are prosecuting the case.
Patient Recruiter for Miami Health Care Agency Pleads Guilty in $25 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A patient recruiter of a Miami health care agency pleaded guilty today for his participation in a $25 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Vicente Guerra-Nistal, 54, pleaded guilty before U.S. District Judge Joan A. Lenard in Miami to one count of conspiracy to commit health care fraud. Guerra was charged in a February 2011 indictment. According to plea documents, Guerra was a patient recruiter for ABC Home Health Care Inc. ABC was a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to court documents, ABC was operated for the purpose of billing the Medicare program for expensive physical therapy and home health care services that were medically unnecessary and/or were never provided. Court documents allege that the medically unnecessary services were prescribed by doctors, including Jose Nunez, M.D., and Francisco Gonzalez, M.D. Nunez and Gonzalez were also charged in the February 2011 indictment along with Guerra, and 18 other co-conspirators.
According to court documents, beginning in approximately January 2006, and continuing until approximately March 2009, Guerra offered and paid kickbacks and bribes to Medicare beneficiaries in return for those beneficiaries allowing ABC to bill Medicare for home health care and therapy services that were medically unnecessary and/or never provided. Guerra was paid kickbacks and bribes by the owners of ABC in return for recruiting the Medicare beneficiaries to ABC. Guerra admitted that he knew the patients he recruited for ABC did not qualify for the services that ABC billed to Medicare. In addition, Guerra knew that the patient files for his recruited patients were falsified in order to make it appear that the patients qualified for home health care and therapy services so that Medicare could be billed for medically unnecessary services.
As a result of Guerra’s participation in the illegal scheme, the Medicare program was billed approximately $194,000 for purported home health care services that were medically unnecessary and/or were never provided.
Sentencing has been scheduled for Oct. 17, 2011. The charge of conspiracy to commit health care fraud carries a maximum prison sentence of 10 years. The defendant also face fines and terms of supervised release, as well as forfeiture of any property or proceeds derived from his criminal activities.
Co-defendants Lisandra Alonso and Luisa Morciego pleaded guilty for their roles in the fraud scheme on July 13, 2011. Drs. Nunez and Gonzalez are scheduled to begin trial on Oct. 10, 2011. An indictment is merely a charge and defendants are presumed innocent until proven guilty.
Today’s charges were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Miami.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Longtime Associate of the New England La Cosa Nostra Pleads Guilty in Extortion and Racketeering ConspiracyRead the Press Release
WASHINGTON – Thomas Iafrate, 70, of Johnston, R.I., pleaded guilty in U.S. District Court in Providence, R.I., today to participating in an extortion and racketeering conspiracy that shook down several Rhode Island businesses for “protection” payments, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Peter F. Neronha for the District of Rhode Island. Iafrate admitted to the court that he was an associate of the New England La Cosa Nostra (NELCN).
Iafrate pleaded guilty to one count of conspiracy to participate in a racketeering enterprise. He faces maximum penalties of 20 years in prison, a fine of $250,000 and three years of supervised release when he is sentenced on Oct. 21, 2011, by U.S. District Court Judge William E. Smith.
According to court records and information presented in court, Iafrate was an associate of the NELCN enterprise while working as a longtime bookkeeper for various Providence adult entertainment businesses, including the Satin Doll, Cadillac Lounge and Northeast Sales. Iafrate participated in the racketeering conspiracy by setting aside and by delivering extortion payments to members of the NELCN, including co-defendant Luigi Manocchio, on behalf of the owners. All three businesses were owned by the same people.
Four alleged members and associates of the NELCN, including an alleged former boss, were charged with crimes involving racketeering, extortion and related crimes in a superseding indictment unsealed in Providence on March 1, 2011. Iafrate was initially charged in an indictment unsealed in January 2011 as part of a coordinated nationwide takedown of organized crime figures. At that time, 91 leaders, members and associates of seven organized crime families of La Cosa Nostra were charged with federal crimes in four judicial districts, including Rhode Island.
The superseding indictment charges longtime NELCN boss Luigi Manocchio, 83, aka “Louie,” “Baby Shacks,” “the Professor” and “the Old Man,” and associate Thomas Iafrate with racketeering conspiracy, extortion conspiracy and extortion. Richard Bonafiglia, 57, and Theodore Cardillo, 67, are charged with racketeering conspiracy and extortion conspiracy. An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Manocchio and Bonafiglia are detained while awaiting trial. Cardillo is free on bond while awaiting trial.
The cases against the four defendants are being prosecuted by Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney William J. Ferland of the District of Rhode Island.
The matter was investigated by the District of Rhode Island’s Organized Crime Task Force, which includes law enforcement agents from the FBI, Rhode Island State Police, the Providence Police Department and the Internal Revenue Service’s Criminal Investigations Division.
Justice Department Settles Allegations of Employment Discrimination by Louisiana Industrial Services CompanyRead the Press Release
WASHINGTON – The Justice Department today reached a settlement with Brand Energy and Infrastructure Services and its subsidiary, Industrial Services LLC (ISI), resolving allegations that ISI, which provides craft services to industry, engaged in a pattern or practice of discrimination against non-citizens in the hiring and employment eligibility verification process.
The department’s investigation was prompted after a work-authorized immigrant lost his job when he could not comply with ISI’s request to provide specific employment documentation beyond what was required by law. Further investigation revealed that ISI’s Prairieville, La., office required all newly hired non-U.S. citizens to present documents issued by the Department of Homeland Security upon hire. The company did not require U.S. citizens to present any particular documents. Under the Immigration and Nationality Act’s (INA’s) anti-discrimination provision, employers are not allowed to discriminate against work-authorized employees during the hiring and employment eligibility verification process.
In addition to ending its impermissible document requests, ISI has agreed to pay $43,560 in civil penalties and $7,200 in back pay, plus interest, to the injured party. Brand and ISI have also agreed to monitoring provisions, as well as training for their human resources personnel.
“The Justice Department will continue to protect the right of work-authorized immigrants to work without having to overcome discriminatory hurdles during the hiring process,” said Thomas E. Perez, the Assistant Attorney General in charge of the Civil Rights Division. “We are pleased to have reached a settlement in this matter, and will continue to educate the public about the anti-discrimination provision of the INA.”
The Office of Special Counsel for Immigration Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired); e-mail [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc
Department of Justice Proposes Legislation to Help Tribes Combat Violence Against Native Women in Indian CountryRead the Press Release
WASHINGTON – Today the Department of Justice proposed legislation that would significantly improve the safety of women in American Indian tribal communities and allow federal and tribal law-enforcement agencies to hold more perpetrators of domestic violence accountable for their crimes.
“The Obama Administration has placed a high priority on combating violence against women in tribal communities,” said Associate Attorney General Tom Perrelli. “We believe that enacting these targeted reforms would significantly improve the safety of women in tribal communities and allow federal and tribal law-enforcement agencies to hold more perpetrators of domestic violence accountable for their crimes.”
The proposed legislation identifies three legal gaps that can be addressed through congressional action:
Recognizing certain tribes’ power to exercise concurrent criminal jurisdiction over domestic-violence cases, regardless of whether the defendant is Indian or non-Indian.
Clarifying that tribal courts have full civil jurisdiction to issue and enforce protection orders involving any persons, Indian or non-Indian — confirming the intent of Congress in enacting the Violence Against Women Act of 2000.
Providing more robust federal sentences for certain acts of domestic violence in Indian Country: a 10-year offense for assaulting a spouse, intimate partner or dating partner by strangling, suffocating or attempting to strangle or suffocate; a five-year offense for assaulting a spouse, intimate partner or dating partner, resulting in substantial bodily injury; and a one-year offense for assaulting a person by striking, beating or wounding.
Violence against American Indian women occurs at epidemic rates. Research reveals that one-third of Native women will be raped during their lifetimes, and nearly 3 out of 5 have been assaulted by their spouses or intimate partners.
The introduction of legislation marks another step in the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities. This effort is driven largely by input gathered from the department’s 2009 Tribal Nations Listening Session, the department’s annual tribal consultations on violence against women, and 2011 tribal consultations specifically addressing potential new legislation to improve safety for Native women.
Review the legislation and read Associate Attorney General Tom Perrelli’s testimony before the Senate Committee on Indian Affairs, July 14, 2011.
Attorney General Holder, Secretary Duncan Announce Effort to Respond to School-to-Prison Pipeline by Supporting Good Discipline PracticesRead the Press Release
WASHINGTON –Attorney General Eric Holder and Secretary of Education Arne Duncan today announced the launch of the Supportive School Discipline Initiative, a collaborative project between the Departments of Justice and Education that will address the “school-to-prison pipeline” and the disciplinary policies and practices that can push students out of school and into the justice system. The initiative aims to support good discipline practices to foster safe and productive learning environments in every classroom.
“Ensuring that our educational system is a doorway to opportunity – and not a point of entry to our criminal justice system – is a critical, and achievable, goal,” said Attorney General Holder. “By bringing together government, law enforcement, academic, and community leaders, I’m confident that we can make certain that school discipline policies are enforced fairly and do not become obstacles to future growth, progress, and achievement.”
"Maintaining safe and supportive school climates is absolutely critical, and we are concerned about the rising rates and disparities in discipline in our nation’s schools,” said Secretary Duncan. “By teaming up with stakeholders on this issue and through the work of our offices throughout the department, we hope to promote strategies that will engage students in learning and keep them safe.”
The goals of the Supportive School Discipline Initiative are to: build consensus for action among federal, state and local education and justice stakeholders; collaborate on research and data collection that may be needed to inform this work, such as evaluations of alternative disciplinary policies and interventions; develop guidance to ensure that school discipline policies and practices comply with the nation’s civil rights laws and to promote positive disciplinary options to both keep kids in school and improve the climate for learning; and promote awareness and knowledge about evidence-based and promising policies and practices among state judicial and education leadership.
In order to implement the initiative, the two departments will coordinate with other organizations in the non-profit and philanthropic communities who are also working to help ensure students succeed by addressing inappropriate school discipline. These groups include the Council of State Governments and the National Council of Juvenile and Family Court Judges. The Supportive School Discipline Initiative will build upon the Department of Education’s Office for Civil Rights’ work to increase and enhance the school discipline data available through the Civil Rights Data Collection and the Departments’ proactive efforts to ensure disciplinary policies support students and are administered in a non-discriminatory manner.
Attorney General Holder and Secretary Duncan announced this initiative during the quarterly meeting of the Coordinating Council on Juvenile Justice and Delinquency Prevention, whose membership includes representatives from 12 federal agencies and nine practitioners. The council coordinates federal juvenile justice and prevention programs to help better serve at-risk youth. A priority issue for the council is education and at-risk youth. More information on the Coordinating Council on Juvenile Justice is available at: www.juvenilecouncil.gov/index.html.
20 July 2011
Supervisor for Texas Natural Gas and Oil Drilling Company Pleads Guilty in Oklahoma to Negligent Violation of Clean Water ActRead the Press Release
WASHINGTON—Gabriel Henson, a supervisor for Integrated Production Services, Inc., a Houston-based natural gas and oil drilling contractor, pleaded guilty to a negligent violation of the Clean Water Act in federal court in Muskogee, Okla., the Department of Justice announced.
Henson was a crew supervisor for Integrated Production Services (IPS), which was performing hydraulic fracturing (also known as “fracking”) at the Pettigrew 18-3H well site, located in Atoka County, Oklahoma. IPS’s fracking operations included using hydrochloric acid to penetrate though bedrock and thousands of feet of substrata.
On May 24, 2007, a tank had leaked an estimated 400-700 gallons of hydrochloric acid onto the earthen pad surface of the well site. The earthen pad was also flooded with water from recent heavy rainfall. In order to remove the rainwater from the well site, Henson drove a pickup truck owned by IPS through an earthen berm, causing the rainwater contaminated with hydrochloric acid to flow off the well pad and down into Dry Creek, a tributary of Boggy Creek, a water of the United States under the Clean Water Act. Environmental damage to the creek was minimized by spill response crews that responded to the site.
“There is no question that the lawful exploration and development of sources of domestic energy is vital to the national interest,” said Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division. “With the increased use of hydraulic fracturing across the country, it is essential that we vigorously enforce all laws intended to protect the environment, as shown by this prosecution involving the discharge of acid into a stream.”
“The defendant's discharge of hydrochloric acid waste into a tributary of Boggy Creek threatened public health and the environment, and required a costly emergency response to minimize harm,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Oklahoma. “Today’s guilty plea demonstrates that those who negligently violate environmental laws will be held accountable for their actions.”
According to a plea agreement, Henson entered a plea of guilty to a negligent violation of the Clean Water Act. If his plea is accepted by the court, Henson faces a term of imprisonment up to one year and a criminal fine of $100,000. The case was investigated by EPA Criminal Investigation Division and Oklahoma Attorney General’s Office of the Inspector General. The case is a joint prosecution between U.S. Attorney’s Office for the Eastern District of Oklahoma and the Environmental Crimes Section of the U.S. Department of Justice, Environment and Natural Resources Division.
Pennsylvania Anesthesiologist Pleads Guilty to Filing a False Document with the Internal Revenue ServiceRead the Press Release
WASHINGTON - Eliseo Roquiz of Erie, Penn., pleaded guilty before U.S. District Judge Sean J. McLaughlin of the Western District of Pennsylvania to charges of filing a false document with the Internal Revenue Service (IRS), the Justice Department and IRS announced today.
According to court documents and statements made in court, Dr. Roquiz, an anesthesiologist, used multiple tax fraud promoters to prevent the IRS from assessing and collecting his income taxes. In 1998, Dr. Roquiz established two sham trusts with the assistance of a California-based organization called National Trust Service and paid an affiliate of National Trust Service to prepare false individual and trust tax returns for him for the years 1998, 1999 and 2000. As part of the fraud, Dr. Roquiz had medical providers pay fees for his services to the sham trusts and then claimed false deductions on the trust returns to reduce the taxes on the income to zero. Dr. Roquiz also opened bank accounts in the name of the sham trusts and transferred title to his personal residence to one of the trusts.
According to court documents and statements made in court, in 2003, after the IRS began to audit his tax returns, Dr. Roquiz hired American Rights Litigators/Guiding Light of God Ministries (ARL/GLGM), an organization located in Florida that sold abusive tax schemes, to send obstructive and frivolous correspondence to the IRS in response to notices that the IRS sent to Dr. Roquiz. After ARL/GLGM was permanently enjoined in February 2004, Dr. Roquiz hired a third fraud promoter, Joseph Saladino, to file frivolous amended U.S. Individual Income Tax Returns (IRS Forms 1040X) for the years 2000 and 2001.
According to public documents and statements, Dr. Roquiz’s efforts to disrupt IRS collection activities culminated with the submission of three false Collection Information Statements for Wage Earners and Self-Employed Individuals (IRS Forms 433-A) between January and June 2005. All three Forms 433-A, which Dr. Roquiz signed under penalties of perjury, were materially false in that Dr. Roquiz failed to disclose that he had transferred his personal residence to his sham trust and that he was a party to a lawsuit. The second and third Forms 433-A, which Dr. Roquiz submitted in May and June of 2005, were also materially false in that Dr. Roquiz failed to disclose the existence of a bank account that he opened in the name on an LLC he had established in New Mexico.
As part of the plea agreement, the parties agreed that the tax loss associated with Dr. Roquiz’s conduct was $342,361.11 plus interest.
The charge against Dr. Roquiz carries a maximum sentence of up to three years in prison. Sentencing is set for Nov. 15, 2011.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax.
Court Bars Georgia Man from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred Cecil A. Collier from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order was signed by Judge W. Louis Sands of the U.S. District Court for the Middle District of Georgia. The court also ordered Collier to provide a list of his customers to the government and to mail a copy of the order to each person for whom he prepared a federal income tax return since Jan. 1, 2007.
According to the injunction order, Collier, working under the trade name “Cairo Fast Tax,” employed at least two schemes to generate false or overstated claims for earned income tax credits, and correspondingly excessive tax refunds, on his customers’ tax returns. The order states that Collier falsely claimed dependents or qualifying children, and falsely overstated customers’ earned income to create inflated tax credit amounts.
According to the court, of the returns prepared by Collier that the Internal Revenue Service (IRS) audited for issues concerning the earned income tax credit, 98 percent of them required adjustments. The order states that Collier’s tax preparation may have caused government losses exceeding $12 million.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department website .
19 July 2011
Two Charged with Conspiring to Act as Unregistered Agents of Pakistani GovernmentRead the Press Release
WASHINGTON – Two individuals have been charged with participating in a long-term conspiracy to act as agents of the Pakistani government in the United States without disclosing their affiliation with the Pakistani government as required by law.
The charges were announced by Lisa Monaco, Assistant Attorney General for National Security; Neil MacBride, U.S. Attorney for the Eastern District of Virginia; and James McJunkin, Assistant Director in Charge of the FBI Washington Field Office.
Syed Ghulam Nabi Fai, 62, a U.S. citizen and resident of Fairfax, Va., and Zaheer Ahmad, 63, a U.S. citizen and resident of Pakistan, are charged in a one-count criminal complaint in the Eastern District of Virginia. The complaint alleges that the defendants have conspired to: 1) act as an agent of a foreign principal without registering with the Attorney General in violation of the Foreign Agents Registration Act (FARA); and 2) falsify, conceal, and cover up material facts they had a duty to disclose in matters within the jurisdiction of Executive Branch agencies of the U.S. government.
Fai was arrested this morning. Ahmad remains at large and is believed to be in Pakistan. Both face a potential sentence of five years in prison if convicted.
“FARA is designed to ensure that the U.S. government and American public know the underlying source of information and identity of persons attempting to influence U.S. policy and laws. The defendants are accused of thwarting this process by concealing the fact that a foreign government was funding and directing their lobbying and public relations efforts in America,” said Assistant Attorney General Monaco.
“Mr. Fai is accused of a decades-long scheme with one purpose – to hide Pakistan’s involvement behind his efforts to influence the U.S. government’s position on Kashmir,” said U.S. Attorney MacBride. “His handlers in Pakistan allegedly funneled millions through the Kashmir Center to contribute to U.S. elected officials, fund high-profile conferences, and pay for other efforts that promoted the Kashmiri cause to decision-makers in Washington.”
“Foreign governments who try to influence the United States by using unregistered agents threaten our national security,” said FBI Assistant Director in Charge McJunkin. “Mr. Fai’s alleged conduct illustrates the risk to our fair and open government. The charges underscore the dedication of Special Agents who enforce laws - like the FARA violations charged here - that are designed to detect and defeat those who attempt to surreptitiously exert foreign influence on our government by using agents who conceal their foreign affiliations . ”
According to an affidavit filed in support of the criminal complaint, Fai serves as the director of the Kashmiri American Council (KAC), a non-governmental organization located in Washington, D.C., that was founded in 1990 and also goes by the name “Kashmir Center.” The KAC describes itself in educational materials as a “not-for-profit organization dedicated to raising the level of knowledge in the United States about the struggle of the Kashmiri people for self-determination.”
The affidavit alleges that, although the KAC held itself out to be a Kashmiri organization run by Kashmiris and financed by Americans, the KAC is one of three “Kashmir Centers” that are actually run by elements of the Pakistani government, including Pakistan’s military intelligence service, the Inter-Services Intelligence Agency (ISI). The two other Kashmir Centers are in London, England, and Brussels, Belgium.
According to the affidavit, a confidential witness told investigators that he participated in a scheme to obscure the origin of money transferred by Pakistan’s ISI to Fai to use as a lobbyist for the KAC in furtherance of Pakistani government interests. The witness explained that the money was transferred to Fai through Ahmad, an American living in Pakistan. A second confidential witness told investigators that the ISI created the KAC to propagandize on behalf of the government of Pakistan with the goal of uniting Kashmir. This witness said ISI’s sponsorship and control of KAC were secret and that ISI had been directing Fai’s activities for the past 25 years.
When questioned by the FBI about these relationships in March 2007, Fai allegedly stated that he had never met anyone who identified himself as being affiliated with the ISI. In March 2010, the Justice Department sent Fai a letter notifying him of his possible obligation to register as a foreign agent with the Justice Department. In his written response to the Justice Department, Fai asserted that neither he nor KAC had ever engaged in any activities for or provided any services to Pakistan or any foreign entity. In a March 2011 interview with the FBI, Fai again denied having any relationship with anyone in the Pakistani government.
The affidavit alleges that Fai has acted at the direction of and with the financial support of the Pakistani government for more than 20 years. The affidavit alleges that four Pakistani government handlers have directed Fai’s U.S. activities and that Fai has been in touch with his handlers more than 4,000 times since June 2008. Fai’s handlers have also allegedly communicated with Ahmad regularly.
For example, the affidavit alleges that Fai repeatedly submitted annual KAC strategy reports and budgetary requirements to his Pakistani government handlers for approval. One document entitled “Plan of Action of KAC / Kashmir Center for Fiscal Year 2009” laid out Fai’s intended strategy to secure U.S. Congressional support in order to encourage the Executive Branch to support self-determination in Kashmir; his strategy to build new alliances in the State Department, the National Security Council, the Congress and the Pentagon, and to expand KAC’s media efforts.
According to the affidavit, Fai also set forth KAC’s projected budgetary requirements from the Pakistani government for 2009, including $100,000 for contributions to members of Congress. There is no evidence that any elected official who received financial contributions from Fai or the KAC was aware that the money originated from any part of the Pakistani government.
According to the affidavit, Fai and the KAC have received at least $4 million, from the Pakistani government since the mid-1990s through Ahmad and his funding network. The money is allegedly routed to Fai through Ahmad and a network of other individuals connected to Ahmad. Ahmad allegedly arranges for his contacts in the United States to provide money to Fai in return for repayment of those amounts in Pakistan.
To date, neither Fai, nor Ahmad, nor the KAC has registered as an official agent of the Pakistani government with the Attorney General as required by FARA.
This investigation is being conducted by the FBI’s Washington Field Office. The prosecution is being handled by Assistant U.S. Attorneys Gordon Kromberg and Daniel Grooms of the U.S. Attorney's Office for the Eastern District of Virginia and Trial Attorney John Gibbs of the Counterterrorism Section of the Justice Department’s National Security Division.
The public is reminded that an indictment and criminal complaint contain mere allegations and that defendants are presumed innocent unless and until proven guilty.
Sixteen Individuals Arrested in the United States for Alleged Roles in Cyber AttacksRead the Press Release
WASHINGTON - Fourteen individuals were arrested today by FBI agents on charges related to their alleged involvement in a cyber attack on PayPal’s website as part of an action claimed by the group “Anonymous,” announced the Department of Justice and the FBI. Two additional defendants were arrested today on cyber-related charges.
The 14 individuals were arrested in Alabama, Arizona, California, Colorado, the District of Columbia, Florida, Massachusetts, Nevada, New Mexico and Ohio on charges contained in an indictment unsealed today in the Northern District of California in San Jose. In addition, two individuals were arrested on similar charges in two separate complaints filed in the Middle District of Florida and the District of New Jersey. Also today, FBI agents executed more than 35 search warrants throughout the United States as part of an ongoing investigation into coordinated cyber attacks against major companies and organizations. Finally, the United Kingdom’s Metropolitan Police Service arrested one person and the Dutch National Police Agency arrested four individuals today for alleged related cyber crimes.
According to the San Jose indictment, in late November 2010, WikiLeaks released a large amount of classified U.S. State Department cables on its website. Citing violations of the PayPal terms of service, and in response to WikiLeaks’ release of the classified cables, PayPal suspended WikiLeaks’ accounts so that WikiLeaks could no longer receive donations via PayPal. WikiLeaks’ website declared that PayPal’s action “tried to economically strangle WikiLeaks.”
The San Jose indictment alleges that in retribution for PayPal’s termination of WikiLeaks’ donation account, a group calling itself Anonymous coordinated and executed distributed denial of service (DDoS) attacks against PayPal’s computer servers using an open source computer program the group makes available for free download on the Internet. DDoS attacks are attempts to render computers unavailable to users through a variety of means, including saturating the target computers or networks with external communications requests, thereby denying service to legitimate users. According to the indictment, Anonymous referred to the DDoS attacks on PayPal as “Operation Avenge Assange.”
The defendants charged in the San Jose indictment allegedly conspired with others to intentionally damage protected computers at PayPal from Dec. 6, 2010, to Dec. 10, 2010.
The individuals named in the San Jose indictment are: Christopher Wayne Cooper, 23, aka “Anthrophobic;” Joshua John Covelli, 26, aka “Absolem” and “Toxic;” Keith Wilson Downey, 26; Mercedes Renee Haefer, 20, aka “No” and “MMMM;” Donald Husband, 29, aka “Ananon;” Vincent Charles Kershaw, 27, aka “Trivette,” “Triv” and “Reaper;” Ethan Miles, 33; James C. Murphy, 36; Drew Alan Phillips, 26, aka “Drew010;” Jeffrey Puglisi, 28, aka “Jeffer,” “Jefferp” and “Ji;” Daniel Sullivan, 22; Tracy Ann Valenzuela, 42; and Christopher Quang Vo, 22. One individual’s name has been withheld by the court.
The defendants are charged with various counts of conspiracy and intentional damage to a protected computer. They will make initial appearances throughout the day in the districts in which they were arrested.
In addition to the activities in San Jose, Scott Matthew Arciszewski, 21, was arrested today by FBI agents on charges of intentional damage to a protected computer. Arciszewski is charged in a complaint filed in the Middle District of Florida and made his initial appearance this afternoon in federal court in Orlando, Fla.
According to the complaint, on June 21, 2011, Arciszewski allegedly accessed without authorization the Tampa Bay InfraGard website and uploaded three files. The complaint alleges that Arciszewski then tweeted about the intrusion and directed visitors to a separate website containing links with instructions on how to exploit the Tampa InfraGard website. InfraGard is a public-private partnership for critical infrastructure protection sponsored by the FBI with chapters in all 50 states.
Also today, a related complaint unsealed in the District of New Jersey charges Lance Moore, 21, of Las Cruces, N.M., with allegedly stealing confidential business information stored on AT&T’s servers and posting it on a public file sharing site. Moore was arrested this morning at his residence by FBI agents and is expected to make an initial appearance this afternoon in Las Cruces federal court. Moore is charged in with one count of accessing a protected computer without authorization.
According to the New Jersey complaint, Moore, a customer support contractor, exceeded his authorized access to AT&T’s servers and downloaded thousands of documents, applications and other files that, on the same day, he allegedly posted on a public file hosting site that promises user anonymity. According to the complaint, on June 25, 2011, the computer hacking group LulzSec publicized that they had obtained confidential AT&T documents and made them publicly available on the Internet. The documents were the ones Moore had previously uploaded.
The charge of intentional damage to a protected computer carries a maximum penalty of 10 years in prison and a $250,000 fine. Each count of conspiracy carries a maximum penalty of five years in prison and a $250,000 fine.
An indictment and a complaint merely contain allegations. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
To date, more than 75 searches have taken place in the United States as part of the ongoing investigations into these attacks.
These cases are being prosecuted by Assistant U.S. Attorneys in the U.S. Attorneys’ Offices for the Northern District of California, Middle District of Florida and the District of New Jersey. The Criminal Division’s Computer Crime and Intellectual Property Section also has provided assistance.
Today’s operational activities were done in coordination with the Metropolitan Police Service in the United Kingdom and the Dutch National Police Agency. The FBI thanks the multiple international, federal and domestic law enforcement agencies who continue to support these operations.
Richmond, Virginia, Businessman Sentenced to 97 Months in Prison for Role in Investment Fraud Scheme Causing Millions in LossesRead the Press Release
WASHINGTON – Julius Everett “Bud” Johnson, 62, a resident of Richmond, Va., was sentenced today to 97 months in prison for his role in an investment scheme resulting in millions of dollars in losses, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia, Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Michael Morehart of the FBI Richmond Field Office.
On April 11, 2011, Johnson pleaded guilty before U.S. District Chief Judge James R. Spencerto one count of conspiracy to commit mail, wire and bank fraud and one count of engaging in unlawful monetary transactions. A hearing will be held before Judge Spencer in Richmond on Sept. 29, 2011, to determine the amount of restitution , which, according to the plea documents, is currently estimated to be approximately $8.9 million.
According to court filings, from prior to July 2009 until at least March 2010, Johnson owned and operated several businesses based in Richmond, including Virginia Group Benefits (VGB); Mid-Atlantic Insurance (MAI); F.I.C. Financial Group Inc.; Benefit Contractors Administrators Inc. (BCA); River City Cleaners LLC; Roberts Awning LLC; Norvell Awning LLC; MHC Linen Services LLC; The Everett Group; and Living Well. Johnson and his coconspirator offered investments in the different businesses, generally including a promise of returns of up to 10 percent within one to four years. Johnson and his coconspirator represented to potential investors that their investment funds would be funneled directly into specific companies, which would generate the returns on investment. Instead, a significant portion of the invested funds was used to repay other investors and to cover operating costs for unrelated businesses.
The case was prosecuted by Trial Attorney Kevin B. Muhlendorf of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mike Gill of the Eastern District of Virginia. The case was investigated by the IRS-CI, FBI and the Virginia State Corporation Commission Bureau of Insurance.
This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .
President of Washington, D.C., Area Community Newspaper Chain Pleads Guilty to Failing to Pay Employment TaxesRead the Press Release
WASHINGTON – Peter Labovitz, of Alexandria, Va., pleaded guilty to two counts of failing to pay employment taxes to the Internal Revenue Service (IRS), the Justice Department and IRS announced today. Specifically, Labovitz pleaded guilty to willfully failing to pay over to the IRS the federal income taxes and Federal Insurance Contributions Act (FICA) taxes due and owing to the United States for Connections Newspapers LLC for the quarters ending Sept. 30, 2007, and Dec. 31, 2007.
According to the plea agreement and statement of facts, Labovitz was the president of Connection Newspapers LLC, a Northern Virginia newspaper publisher that currently publishes approximately 15 community newspapers throughout Northern Virginia and Maryland. Between 2002 and 2008, Labovitz ran Connection Newspapers’ day-to-day operations, directed employees, approved payments by the company and made financial decisions on behalf of the company. Labovitz admitted that between 2002 and 2008, he caused to be deducted and collected from the total taxable wages of his employees federal income taxes and FICA taxes. However, Labovitz failed to timely pay over more than $940,000 in federal income taxes and FICA taxes withheld and due and owing to the United States, despite the fact that he was required to do so by law.
Labovitz faces up to one year in prison, a $100,000 fine and up to one year of supervised release for each count of conviction. Magistrate Judge John F. Anderson scheduled sentencing for Sept. 27, 2011, at 10 a.m.
The case was investigated by the IRS-Criminal Investigation Division and prosecuted by Assistant U.S. Attorney Tim Belevetz and Justice Department‘s Tax Division Trial Attorney Caryn Finley.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax.
Jersey City, N.J. to Upgrade and Repair Sewer System to Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON – A settlement between the United States and the Jersey City, N.J. Municipal Utilities Authority (JCMUA) will resolve Clean Water Act violations by JCMUA for failing to properly operate and maintain its combined sewer system, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
JCMUA violations included releases of untreated sewage into the Hackensack River, Hudson River, Newark Bay and Penhorn Creek. JCMUA will invest more than $52 million in repairs and upgrades to its existing infrastructure and pay a civil penalty of $375,000.
Under the settlement, JCMUA is required to comply with its Clean Water Act permit and will conduct evaluations to identify the problems within the system that led to releases of untreated sewage. JCMUA will also complete repairs to approximately 25,000 feet of sewer lines over the next eight years. Finally, JCMUA will invest $550,000 into a supplemental environmental project that will remove privately-owned sewers from homes in several neighborhoods in Jersey City and replace them with direct sewer connections, creating better wastewater collection in those areas.
“This agreement, like others reached with cities across the country, addresses critically important and long-overdue upgrades to the municipal sewer system in Jersey City, which are required if JCMUA is to achieve compliance with the nation’s Clean Water Act,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Among the actions required by the agreement, a supplemental environmental project will replace privately-owned sewers with direct sewer connections, directly benefiting economically disadvantaged residents by improving wastewater collection and preventing sewage backups in their homes.”
“Investment in municipal infrastructure and local commitments like those in today’s agreement are practical and necessary solutions to sewer overflow problems,” said Judith A. Enck, Administrator for EPA’s Region 2 Office. “Today’s agreement will help improve water quality in waters around Jersey City and protect community residents from exposure to raw sewage and contaminated stormwater, now, and into the future.”
Combined sewer systems are designed to transport sewage, industrial wastewater and rainwater runoff in the same pipes to wastewater treatment plants. During periods of heavy rainfall, the volume of wastewater traveling through a combined sewer system can exceed the capacity of the treatment plant. Resulting overflows, called Combined Sewer Overflows (CSOs), contain not only stormwater but also pollutants such as untreated human and industrial waste, toxic materials, and debris. They pose risks to human health, threaten aquatic habitats and life, and impair the use and enjoyment of the nation’s waterways.
EPA recently released a report, Keeping Raw Sewage and Contaminated Stormwater Out of the Public’s Water, to answer commonly asked questions about combined sewer overflows. To read or download a copy of the report, visit www.epa.gov/region2/water/ .
The consent decree is subject to a 30-day public comment period and final court approval. A copy of the consent decree is available on the Department of Justice web site at www.usdoj.gov/enrd/Consent_Decrees.html
Executive of Taiwan Aftermarket Auto Lights Manufacturer Arrested and Indicted for Participation in Price-Fixing ConspiracyRead the Press Release
WASHINGTON – An executive of a Taiwan manufacturer of aftermarket auto lights was arrested on July 12, 2011, at Los Angeles International Airport and indicted today for participating in a global conspiracy to fix the prices of aftermarket auto lights, the Department of Justice announced today. Aftermarket auto lights are incorporated into an automobile after its original sale, often as repairs following a collision or as accessories and upgrades.
According to a one-count felony indictment filed today in U.S. District Court in San Francisco, Homy Hong-Ming Hsu conspired with others to suppress and eliminate competition by fixing the prices of aftermarket auto lights. The department said that Hsu, the vice chairman and second highest-ranking officer of a Taiwan manufacturer of aftermarket auto lights, participated in the conspiracy from as early as November 2001 until about September 2008.
According to the charge, Hsu and co-conspirators participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights at certain predetermined levels. The participants in that conspiracy issued price announcements and price lists in accordance with the agreements reached, and collected and exchanged information on prices and sales of aftermarket auto lights for the purpose of monitoring and enforcing adherence to the agreed-upon prices. The department said that the conspirators met in Taiwan, the United States and elsewhere for their discussions.
Hsu is the third individual to be charged in connection with the department’s ongoing investigation into the aftermarket auto lights industry. On March 30, 2011, Polo Shu-Sheng Hsu was sentenced to serve 180 days in prison and to pay a $25,000 criminal fine for his participation in the aftermarket auto lights price-fixing conspiracy. On June 7, 2011, Chien Chung Chen, aka Andrew Chen, pleaded guilty to his participation in the conspiracy and is scheduled to be sentenced on Dec. 13, 2011. Both Polo Shu-Sheng Hsu and Chen were executives at U.S. companies that distributed aftermarket auto lights.
Hsu is charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.
This case is part of an ongoing joint investigation of the Department of Justice Antitrust Division’s San Francisco Office and the FBI in San Francisco. Anyone with information concerning illegal or anticompetitive conduct in the aftermarket auto lights industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.
18 July 2011
Two Arkansas Men Plead Guilty to Federal Hate Crime for Cross BurningRead the Press Release
WASHINGTON – Tony Branscum, 25, and James Bradley “Brad” Branscum, 23, both of Salado, Ark., pleaded guilty today to criminal violations of housing rights related to their role in the Aug. 28, 2010, cross burning in front of an African American man’s apartment in Salado, the Department of Justice announced.
The two men, who are first cousins, along with co-defendant, Curtis Coffee, 19, also of Salado, were indicted in November 2010, by a federal grand jury on civil rights charges and other related federal charges stemming from their participation in the cross burning.
Both Branscums admitted in court that on the night of Aug. 28, 2010, they, along with Coffee, devised a plan to burn a cross in the yard of an African-American in the Salado community. Thereafter, Tony Branscum constructed a wooden cross in a workshop behind his house. The men then covered the cross in gasoline-soaked clothing and Brad Branscum drove them and the cross to the victim’s residence. Upon arriving at the residence, one of the men propped up the cross on a satellite dish and ignited it.
“Interfering with a person’s housing rights because of his race will not be tolerated in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.”
Both Tony and Brad Branscum face up to 10 years in prison and fines of up to $250,000.
This case was investigated by the Little Rock, Ark., Division of the FBI and is being prosecuted by Assistant U.S. Attorney John Ray White of the Eastern District of Arkansas and Trial Attorneys Cindy Chung and Henry Leventis of the Civil Rights Division.
Tax Defendant Pleads Guilty in Florida to Filing False Liens for $48.489 Billion Against Federal Law EnforcementRead the Press Release
WASHINGTON - Mark D. Leitner entered a plea of guilty in the Northern District of Florida to filing false liens against federal law enforcement and corruptly endeavoring to impede and impair the Internal Revenue Service (IRS), the Justice Department announced today. Senior District Court Judge Lacey A. Collier presided over the hearing at the U.S. District Court in Pensacola, where Leitner admitted to filing the false liens against the former U.S. Attorney for the Northern District of Florida, the former clerk of court, and numerous Assistant U.S. Attorneys, Department of Justice trial attorneys and an IRS criminal investigation special agent involved in a 2010 tax fraud prosecution against Leitner.
According to the documents filed in the court proceeding, Leitner was previously a defendant in a criminal trial, U.S. v. Hirmer, et. al., in the Northern District of Florida in March 2010. A jury in the Northern District of Florida found him guilty of conspiracy to defraud the IRS after a month-long jury trial. During that jury trial and after the jury returned the guilty verdict, Leitner publicly filed false maritime liens against the property of the prosecutors, investigators and court personnel involved in the criminal trial. The liens falsely claimed that Leitner was owed $48.489 billion from each individual. On five of the seven false liens, Leitner publicly disclosed individuals’ correct Social Security numbers and other personal identifying information. Leitner also filed and mailed numerous harassing and frivolous documents to the courts and personnel involved in this case.
Leitner, who is presently serving a five year sentence for his 2010 tax fraud conviction, now faces up to an additional thirteen years of incarceration and fines of more than $500,000. Judge Collier scheduled sentencing for Sept. 27, 2011.
The case was investigated by Treasury Inspector General for Tax Administration, Department of Treasury.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Owner of Miami Company Sentenced to 63 Months <br /> in Prison for Scheme to Defraud the U.S. Export-Import BankRead the Press Release
WASHINGTON – The owner of an investment planning company in Miami was sentenced today to 63 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of $5.2 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank.
Carlos L. Morano, 51, was sentenced by Judge Cecilia M. Altonaga in U.S. District Court in Miami. In addition to his prison term, Morano was sentenced to three years of supervised release and was ordered to pay $5.2 million in restitution and $6.8 million in forfeiture. Morano pleaded guilty on May 6, 2011, to one count of conspiracy to commit wire fraud and one count of wire fraud in connection with a scheme to defraud the Ex-Im Bank of approximately $5.2 million. Morano, a naturalized U.S. Citizen, most recently resided in Buenos Aires, Argentina, until his arrest on Nov. 8, 2010, in Atlanta, where he arrived after an international flight from Argentina. The warrant for his arrest was obtained by Ex-Im Office of Inspector General (OIG) Special Agents.
According to court documents, Morano was the owner of CLM Financing and Investments, an investment planning company located in Miami that purported to be in the business of brokering loans and providing financial advice to Florida exporters. During his plea hearing, Morano admitted that he assisted 17 exporters obtain fraudulent loans that were insured by the Ex-Im Bank. According to court records, Morano and others misappropriated the loan proceeds for their own use and benefit. From 2007 through 2010, Morano, through his company CLM, charged exporters up to $35,000 to prepare fraudulent loan applications and financial statements. Morano admitted that he instructed the exporters on how to prepare false purchase orders, invoices, account receivable forms, and bills of lading to falsely represent to various lending banks and the Ex-Im Bank the purchase and export of U.S. goods to buyers in South and Central America. Morano often charged the exporters a monthly service fee to continue providing false shipping documents and financial documents that would pass Ex-Im Bank review.
According to court records, all of the loans involving Morano were fraudulent. As a result of the fraud, the loans went into default, causing the Ex-Im Bank to pay claims losses to the lending banks in the amount of $5,219,756.
The Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing. The Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.
The case is being prosecuted by Trial Attorneys Patrick Donley and William Bowne of the Criminal Division’s Fraud Section. The case was investigated by the Ex-Im Bank OIG.
Michigan Businessman Sentenced to 15 Months in Prison for Defrauding the Federal E-Rate ProgramRead the Press Release
WASHINGTON — The president and part owner of a Michigan-based Internet and technology services company was sentenced today to serve 15 months in prison for defrauding the federal E-Rate program, the Department of Justice announced.
Jeremy R. Sheets was also sentenced by Judge Paul L. Maloney of U. S. District Court in Kalamazoo, Mich., to pay a $12,000 criminal fine and to pay $115,534 in restitution for engaging in wire fraud in connection with the E-Rate applications of two school districts his company serviced in western Michigan. Sheets was charged with wire fraud on Dec. 9, 2010, and pleaded guilty on Jan. 24, 2011.
As a result of the Antitrust Division’s investigation into fraud and anticompetitive conduct in the E-Rate program, a total of seven companies and 24 individuals have pleaded guilty, been convicted at trial or entered civil settlements. Those companies and individuals have been sentenced to pay criminal fines and restitution totaling more than $40 million. Eighteen individuals, including Sheets, have been sentenced to serve prison time.
According to the charge, Sheets violated E-Rate program rules by compensating two school districts for their share of E-Rate expenses. In addition, Sheets utilized E-Rate funds to purchase undisclosed items, some of which were not eligible for E-Rate funding. Sheets concealed his violation of E-Rate program rules from the E-Rate program by fraudulently misrepresenting that the schools had been billed for their E-Rate expenses when, in fact, Sheets had reimbursed the schools for their share of expenses. The department said Sheets engaged in the wire fraud beginning in or about December 2001 and continuing until about December 2007.
The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company, under the auspices of the Federal Communications Commission (FCC). The program provides subsidies to economically disadvantaged schools and libraries. Depending on the financial needs of the applicant schools, the program pays 20 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.
Today’s sentencing resulted from an investigation by the Department of Justice Antitrust Division’s Chicago Field Office, with the assistance of the U.S. Attorney’s Office in Grand Rapids, the FBI’s Grand Rapids Office of its Detroit Division and the FCC’s Office of Inspector General. Anyone with information concerning violations of the E-Rate program or other anti-competitive conduct is urged to call the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
D.C. Federal Court Bars Company from Promoting Alleged Tax Scheme Involving Improper Easements on Historic BuildingsRead the Press Release
WASHINGTON – A District of Columbia federal court has entered a permanent injunction order against Steven McClain and the Trust for Architectural Easements Inc. (formerly known as the National Architectural Trust), the Justice Department announced today. The civil court order bars the defendants from promoting a scheme that, according to the government complaint, encouraged taxpayers in Boston, New York City, Baltimore and Washington D.C. to claim unwarranted charitable tax deductions for donations of façade conservation easements on historic buildings. The defendants consented to the injunction without admitting the allegations against them. The injunction order does not preclude the Internal Revenue Service (IRS) from assessing monetary penalties against the defendants for past actions, and also does not preclude the defendants from challenging any such penalties.
According to the government complaint, the defendants falsely told prospective customers that, in exchange for donating easements on their historic properties preventing façade alteration, the customers could claim charitable deductions equal to 10 to 15 percent of the property value, and that this range reflected official IRS policy. In fact, the complaint alleges, the IRS never had any such policy, and the actual value of façade easements, if any, must be determined on a case-by-case basis. The complaint also alleges that the defendants manipulated the easement appraisal process by steering donors to appraisers who the defendants knew would employ the 10-to-15-percent valuation method, leading to improper appraisals that yielded large tax deductions regardless of the easements’ actual effect on property value.
Through 2008, the complaint alleges, the total value of façade easement tax deductions attributable to the defendants’ scheme exceeded $1.2 billion. The complaint states that the IRS has repeatedly disallowed charitable deductions claimed by the defendants’ customers and estimates that the tax revenue lost through 2006 as a result of the scheme is $250 million.
The injunction order bars the defendants from promoting the existence of a 10-to-15-percent valuation range and from accepting donations of easements that the defendants know or have reason to know lack a conservation purpose as defined by federal tax law. The order also blocks the defendants from participating in the appraisal process for an easement in any regard, other than by referring donors to lists of potential appraisers prepared by neutral third parties. The defendants are enjoined from representing to donors that they can expect an easement to diminish the value of their property in all circumstances or to result automatically in a charitable deduction. The order also requires the defendants to submit to independent monitoring of their practices for the next two years to ensure compliance with the injunction.
In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
15 July 2011
Virginia Real Estate Businessman Pleads Guilty to Mortgage and Investment Fraud SchemesRead the Press Release
WASHINGTON – Alexander Otis Matthews, a Virginia real estate businessman pleaded guilty today to fraud charges in connection with mortgage and investment schemes to obtain more than $12 million in fraudulent loans.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia, U.S. Attorney Rod J. Rosenstein of the District of Maryland, Assistant Director James W. McJunkin and Special Agent in Charge Richard McFeely of the FBI.
Matthews, 46, of Dunn Loring, Va., pleaded guilty today before Judge Liam O’Grady in U.S. District Court in the Eastern District of Virginia to one count of bank fraud and one count of wire fraud. Matthews was charged with bank fraud on Nov. 17, 2010, in an indictment filed in the District of Maryland and charged with wire fraud on Feb. 17, 2011, in an indictment filed in the Eastern District of Virginia. Matthews’ sentencing is scheduled for Sept. 30, 2011.
In his guilty plea, Matthews admitted that between November 2005 and May 2011, he orchestrated at least three mortgage fraud schemes in which he used “straw borrowers” with good credit scores to apply for and obtain nearly $11.5 million in fraudulent loans relating to three Northern Virginia residential properties. Matthews did so by causing lenders to receive false and inflated income information about the straw borrowers, and Matthews submitted forged and fraudulent documentation to lenders purporting to verify that false information. After attempting to refinance the loans and forestall foreclosure, Matthews ultimately defaulted on the loans for each of the three properties.
Matthews also admitted in his plea that between June 2008 and October 2010, he engaged in a fourth, related scheme to obtain more than $800,000 in fraudulent loans from at least eight residents of Maryland and Virginia. Matthews obtained the loans by promising those individuals high rates of return over short periods of time in exchange for money that Matthews claimed he would invest in various property ventures. Matthews later defaulted on each of those loans, generally paying back no more than 10 percent of the borrowed amounts.
According to court documents, Matthews perpetrated his schemes through various purported real estate entities, including American Investments Real Estate Corporation (AIREC), AIREC Realty, Kibra Construction, Ezana Corporation and Farmville Group LLC.
At sentencing, Matthews faces a maximum penalty of 30 years in prison on the bank fraud count and 20 years in prison on the wire fraud count. For each count, Matthews also faces a fine of the greater of $250,000 or twice the value gained or lost from the scheme. In his plea, Matthews agreed to forfeiture of $7.9 million and restitution of approximately $5.3 million.
The case is being prosecuted by Trial Attorneys Ryan S. Faulconer and Peter A. Frandsen of the Criminal Division’s Fraud Section, as well as Assistant U.S. Attorneys Raymond E. Patricco Jr. and Jack Hanly for the Eastern District of Virginia and Assistant U.S. Attorney Michael J. Leotta for the District of Maryland. The case is being investigated by the FBI’s Washington and Baltimore Field Offices, with substantial assistance from the Montgomery County, Md., State’s Attorney’s Office and the Alexandria, Va., Office of the U.S. Trustee.
Richard A. Wieland to Serve as U.S. Trustee for Colorado, Utah and Wyoming for Interim PeriodRead the Press Release
WASHINGTON - Richard A. Wieland, the U.S. Trustee for Kansas, Oklahoma and New Mexico (Region 20), has been designated by Attorney General Eric Holder to also serve as the U.S. Trustee for Colorado, Utah and Wyoming (Region 19) for an interim period beginning on July 15, 2011, the Executive Office for U.S. Trustees announced today. He replaces Charles F. McVay, who is resigning after serving as U.S. Trustee since March 2004.
Mr. Wieland was appointed U.S. Trustee for Region 20 in January 2008, after serving as a Trial Attorney in the U.S. Trustee Program's Wichita, Kan., office since 1988. From November 2003 to November 2007, Mr. Wieland was designated as a Special Assistant U.S. Attorney in the District of Kansas to assist in the prosecution of criminal bankruptcy fraud cases, and in 2002 he received the Director's Award for the Prevention of Fraud and Abuse. Mr. Wieland received his law degree from the University of Tulsa. He received his undergraduate degree and a Masters in Business Administration from Western Illinois University in Macomb, Ill.
The U.S. Trustee Program (USTP) is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 19 is headquartered in Denver with additional offices in Salt Lake City and Cheyenne, Wyo.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Organized Romanian Criminal Groups Targeted by DOJ and Romanian Law EnforcementRead the Press Release
WASHINGTON – An ongoing Internet fraud scheme conducted by several networks of organized cyber criminals in Romania and the United States has been disrupted as a result of a series of law enforcement actions coordinated since 2010 between Romanian and U.S. law enforcement, including numerous arrests and searches that took place yesterday in Romania.
More than 100 individuals have been arrested and charged in Romania and judicial districts in the United States as a result of close cooperation between the Romanian General Inspectorate of Police, Directorate for Combating Organized Crime, the Romanian Directorate for Investigating Infractions of Organized Crime and Terrorism (DIICOT), the Romanian Intelligence Service (SRI), the General Directorate of Jandarmeria in Romania (GIJR) and the FBI, the U.S. Secret Service, the Computer Crime and Intellectual Property Section (CCIPS) in the Justice Department’s Criminal Division, and the U.S. Attorneys’ Offices for the Southern District of Florida, the Western District of Pennsylvania and the Eastern District of Missouri.
Yesterday, Romania law enforcement executed 117 searches targeting more than 100 individuals allegedly involved in the fraudulent scheme involving fake sales of merchandise through the Internet. Romanian law enforcement targeted individuals organizing and perpetrating this fraud from Romania.
According to U.S. court documents, in many of the cases, conspirators located in Romania would post items for sale such as cars, motorcycles and boats on Internet auction and online websites. They would instruct victims located in the United States and elsewhere who wanted to buy those items to wire transfer the purchase money to a fictitious name they claimed to be an employee of an escrow company. Once the victim wired the funds, the co-conspirators in Romania would text information about the wire transfer to co-conspirators in the United States known as “arrows” to enable them to retrieve the wired funds. They would also provide the arrows with instructions as to where to send the funds after retrieval. The arrows in the United States would go to money transmitter service counters such as Western Union or MoneyGram International, provide false documents including passports and drivers’ licenses in the name of the recipient of the wire transfer, and obtain the funds. They would subsequently wire the funds overseas, typically to individuals in Romania, minus a percentage kept for their commissions. In some cases, co-conspirators in Romania also directed arrows to provide bank accounts in the United States where larger amounts of funds could be wired by victims of the fraud. The victims would not receive the items they believed they were purchasing.
The Romania investigation is being conducted in conjunction with ongoing criminal investigations in the United States that also have been targeting this criminal activity. Since May 2010, the FBI and the U.S. Attorney’s Office for the Southern District of Florida have arrested and prosecuted numerous individuals from Romania, Moldova and the United States allegedly involved in this fraud scheme. Vadim Gherghelejiu, 29, of Moldova; Anatolie Bisericanu, 25, of Moldova; Jairo Osorno, 22, of Surfside, Fla.; Jason Eibinder, 22, of Sunny Isles Beach, Fla.; and Ciprian Jdera, 25, of Romania, have been convicted in the Southern District of Florida of conspiracy to commit wire fraud.
A 21-count indictment returned in Miami on Feb. 22, 2011 charged Pedro Pulido, 41, of Pembroke Pines, Fla.; Ivan Boris Barkovic, 19, of Sunny Isles Beach; Beand Dorsainville, 20, of North Miami Beach, Fla.; Sergiu Petrov, aka “Serogia,” 27, of Moldova; Oleg Virlan, 32, of Moldova; Marian Cristea, 22, of Romania; and Andrian Olarita, 26, of Moldova, with conspiracy to commit wire fraud and substantive counts of wire fraud. Pulido, Barkovic, Dorsainville and Olarita have pleaded guilty to conspiracy to commit wire fraud. Petrov, Virlan and Cristea remain at large and are considered fugitives.
On July 8, 2011, Adrian Culda, 37, of Romania, was arrested and subsequently charged in a complaint filed in Miami with conspiracy to commit wire fraud as part of this alleged cyber crime activity. Tiberiu Zachiteanu, 19, of Romania, was also charged in the same complaint with conspiracy to commit wire fraud and was arrested on July 12, 2011.
An investigation conducted by the U.S. Attorney’s Office for the Western District of Pennsylvania led to the arrests of seven defendants, including one individual in Pittsburgh, three individuals in the Eastern District of Missouri, two individuals in Fort Bend County, Texas, and one individual in Kentucky.
Marion Potcovaru, 30, of Romania, pleaded guilty on Feb. 2, 2011, to wire fraud related charges in the Western District of Pennsylvania. In St. Louis, the U.S. Attorney’s Office charged Augustin Prundurelu, 32, and Georgiana Andrei, 25, both of Romania, with forgery and passport fraud. Both defendants pleaded guilty and each were sentenced to six months in prison and ordered to pay restitution of $18,365. In addition, Sorin Mihai Madaian, 22, of Romania, pleaded guilty on May 23, 2011, in the Eastern District of Missouri to passport fraud charges. Victor Angelescu, 28, of Romania, was charged by the Commonwealth Attorney’s Office for the 27th Judicial Circuit of Kentucky with related wire fraud charges.
In Fort Bend County, Texas, Klara Mirabela Rusu, 24, and Eduard Sorin Neacsu, 36, were arrested on June 3, 2011, by officers from the Houston Police Department and charged by Fort Bend and Harris County authorities with money laundering and making false statements to obtain property. Rusu was indicted by a Fort Bend County grand jury on July 11, 2011, and charged with the felony offenses of money laundering and making a false statement. Neacsu’s grand jury date is pending due to possible additional charges. Both individuals are currently detained.
According to court documents, detectives observed Rusu and Neacsu enter a WalMart store, where Rusu and Neacsu presented a MoneyGram voucher and false identifications to a store clerk. Rusu and Neascu received $2,890 through Western Union and Money Gram from a victim in another state who had wired the money in response to an Internet advertisement for merchandise, which the victim never received. Rusu and Neacsu were later arrested and a search of their room produced a large amount of U.S. currency, computers, printers, plastic for manufacturing false identifications, an exacto knife, multiple mobile phones and false identifications with Neacsu’s picture.
An indictment is merely an allegation, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The Internet fraud scheme has resulted in an estimated loss of more than $10 million from victims, including those in the United States. The full loss amount and identification of additional victims is ongoing.
Over the last 10 years, U.S. law enforcement authorities have strengthened ties with Romanian law enforcement authorities to address the rising threats posed by Romanian-based organized cyber criminal networks. To date, hundreds of defendants have been arrested and charged in the United States, Romania, and other countries as a result of this cooperation.
The Department of Justice International Organized Crime Intelligence and Operations Center (IOC-2) has provided support and assistance to these ongoing investigations. IOC-2 partners with various law enforcement agencies to combine data and produce actionable leads for investigators and prosecutors working nationwide to combat international organized crime. IOC-2 also coordinates the resulting multi-jurisdictional investigations and prosecutions with its member agencies, U.S. Attorneys’ Offices and foreign law enforcement authorities.
The ongoing investigations are being led by the FBI and the U.S. Secret Service. U.S. Immigrations and Custom Enforcement is participating in the investigation related to the Pittsburgh cases. The federal cases are being prosecuted by Assistant U.S. Attorneys from the U.S. Attorneys’ Offices for the Southern District of Florida, the Western District of Pennsylvania and the Eastern District of Missouri, with support from CCIPS.
Local law enforcement assisting in these prosecutions include the Medina County, Ohio, Sheriff’s Office; the London, Ky., Police Department; Memphis, Tenn., Airport Police; the Kirkwood, Mo., Police Department; the Fort Bend and Harris County, Texas, District Attorneys’ Offices; the Houston Police Department; the Hallandale Beach, Fla., Police Department; the Pembroke Pines Police Department; the Miami Gardens Police Department; the Sunny Isles Beach Police Department; the North Miami Beach Police Department and the Davie, Fla., Police Department.
Also assisting law enforcement were the FBI’s Internet Crime Complaint Center (IC3), Wal-Mart Stores, Western Union, MoneyGram International, the National Cyber-Forensics and Training Alliance (NCFTA) and Publix Grocery Stores.
Victims of Internet crime are encouraged to report evidence of fraudulent activity to the IC3 via www.ic3.gov .
Internet Communications Firm Owners Plead Guilty to Employment Tax Fraud and Failure to Pay TaxRead the Press Release
WASHINGTON – Frank G. Bivings and Isabelle Blanco of Washington, D.C., husband and wife and co-owners of The Bivings Group Inc., pleaded guilty today to charges stemming from the failure to pay more than $2 million in employment taxes to the Internal Revenue Service (IRS). The guilty plea took place in U.S. District Court for the District of Columbia.
Bivings pleaded guilty to one count of failure to pay over employment taxes. Blanco pleaded guilty to one count of failure to pay a tax. Sentencing for both defendants is scheduled for Oct. 20, 2011.
The Bivings Group was a full-service Internet communications business. In pleading guilty, Bivings and Blanco both admitted that between Jan. 1, 2002, and June 30, 2008, The Bivings Group failed to pay over to the IRS a total of $2,420,927 in employment taxes, which includes withholding and Federal Insurance Contributions Act (FICA) taxes. Of this amount, $1,813,488 represented the money that was withheld from employees for taxes but that was not paid over to the IRS. The department said that, instead of paying these payroll taxes to the IRS, the defendants used the funds to pay themselves substantial salaries and withdrew additional corporate funds for other expenses.
Bivings faces a maximum of five years in prison, and Blanco faces a maximum of one year in prison. The parties agreed, however, that the calculation under the advisory U.S. Sentencing Guidelines for each defendant is 30 to 37 months in prison. Both defendants also agreed to pay $2,420,927 in restitution.
In announcing today’s guilty plea, Principal Deputy Assistant Attorney General John A. DiCicco, U.S. Attorney Ronald C. Machen Jr., of the District of Columbia and Acting Special Agent in Charge Jeannine A. Hammett commended the investigatory work of IRS-Criminal Investigation Special Agent Michael Helgesen. They also praised the work of Assistant U.S. Attorney Susan B. Menzer and Tax Division Trial Attorney Tino Lisella, who investigated and prosecuted the case.
Former President of Lee Dynamics International Pleads Guilty to Conspiracy and <br /> Bribery Related to Department of Defense Contracts in IraqRead the Press Release
WASHINGTON – The former president of Lee Dynamics International, a defense contractor providing services to the U.S. military in Iraq, pleaded guilty today to an indictment charging him with a scheme to bribe military officials in order to obtain government contracts, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Justin W. Lee, 33, a resident of Philadelphia, pleaded guilty before U.S. District Judge Joel H. Slomsky in the Eastern District of Pennsylvania to one count of conspiracy to commit bribery and four counts of bribery. Lee and his father, George H. Lee Jr., were charged in an indictment unsealed on May 27, 2011, in the Eastern District of Pennsylvania.
Justin Lee admitted that he conspired with his father and others to bribe military contracting officers in order to obtain government contracts to support U.S. combat operations in Iraq. According to court documents, Justin Lee provided things of value, including cash, airline tickets, meals, hotel stays, spa visits and jobs, which were valued at a total of more than $1.2 million, to public officials in return for official acts which helped him obtain lucrative Department of Defense contracts. The contracts included multi-million dollar contracts for the storage of weapons at various warehouses in Iraq as well as bottled water.
“For Justin Lee and others, bribery was a way of doing business,” said Assistant Attorney General Breuer. “He offered military officials vacations to Thailand and Europe, Rolex watches, cash, and even employment with their company, all in order to secure lucrative defense contracts. Private contractors will not be allowed to win business by stacking the deck against the competition and, as this investigation shows, the military officials who participate in such fraudulent schemes will also be held to account.”
“Justin Lee’s guilty plea is a prime example of the teamwork amongst Special Agents of the Major Procurement Fraud Unit (MPFU), US Army Criminal Investigation Command (CID), our law enforcement partner agencies, and with the DOJ attorneys that comprised the former Kuwait Fraud Task Force,” said James K. Podolak, director of Army CID’s MPFU. “Charged with protecting the Army’s interests with respect to contract fraud and corruption, in a global environment, the MPFU stands ready with Special Agents strategically assigned throughout the U.S. and abroad to bring these criminals to justice.”
“This plea illustrates that it does not matter where they reside, work, or travel, the Defense Criminal Investigative Service will not stop pursuing those individuals who steal funds from the Department of Defense and U.S. Taxpayers” said Robert Craig, Special Agent in Charge for the Defense Criminal Investigative Service, Mid-Atlantic Field Office.
“I am pleased that Justin Lee pleaded guilty to the bribery charges filed against him for the abusive and illegal contracting schemes he engineered as a private contractor in Iraq,” said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction. “I commend my SIGIR agents and our partners for persevering in this complex case, which is part of perhaps the largest fraud conspiracy yet uncovered in the reconstruction program.”
Four of the military contracting officials with whom Justin Lee conspired have pleaded guilty: John Cockerham Jr., Markus McClain, Kevin A. Davis and Levonda Selph.
Justin Lee faces up to 15 years in prison for each count of bribery, as well as a fine of $250,000 or three times the value of the bribe for each count. He also faces up to five years in prison for the conspiracy count as well as a fine of $250,000.
George Lee, the former chairman and chief executive officer of Lee Dynamics International, remains at large. An indictment is merely a charge and a defendant is presumed innocent until proven guilty.
The case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Trial Attorneys Mark W. Pletcher and Emily W. Allen of the Criminal Division’s Fraud Section. Substantial assistance has been provided by the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. The case is being investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction, the FBI, the U.S. Immigration and Customs Enforcement of the Department of Homeland Security and the Internal Revenue Service.
Former Alabama Mayor Sentenced to Two Years in Prison for Filing False Tax ReturnsRead the Press Release
WASHINGTON -- John Jackson, the former mayor of White Hall, Ala., was sentenced to two years in prison today, the Department of Justice and the Internal Revenue Service (IRS) announced. According to court documents, Jackson filed false joint 2004, 2005 and 2006 U.S. Individual Income Tax Returns (IRS Forms 1040) that did not report all of the total income earned by Jackson and his spouse. Jackson did not report as income money he took from the city of White Hall and money he diverted from non-profit companies who handled the gaming license for White Hall.
Jackson was also sentenced to one year of supervised release, and ordered to pay a $25,000 fine and restitution in the amount of $11,065.
John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division and George Beck, U.S. Attorney for the Middle District of Alabama, commended the IRS special agents who investigated this case and Trial Attorney Michael Boteler of the Justice Department’s Tax Division, Southern Criminal Enforcement Section and Assistant U.S. Attorney Todd Brown who prosecuted the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
14 July 2011
Pittsburgh Crips Gang Member Sentenced to 128 Months in PrisonRead the Press Release
WASHINGTON – A Pittsburgh man was sentenced today to 128 months in prison for conspiring to conduct a racketeering enterprise related to his membership in a Pittsburgh Crips gang, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Vallon Wallace, 24, aka “VL,” pleaded guilty on Feb. 24, 2011, before Senior U.S. District Judge Gustave Diamond to one count of conspiracy to engage in a racketeering enterprise. On July 12, 2011, Aaron Ford, 22, aka “.40 Cal.,” pleaded guilty to one count of conspiracy to engage in a racketeering enterprise related to his membership in the Pittsburgh Crips gang. Sentencing for Ford is scheduled for Nov. 10, 2011.
According to court documents, Wallace, Ford and others participated in a pattern of racketeering activity that included multiple acts involving robberies at gun point; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Wallace and Ford were members of the Brighton Place Crips, a criminal street gang that controlled an area of Brighton Place and Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh. The Brighton Place Crips were formed in the early 1990s; in 2003, it formed an alliance with the Northview Heights/ Fineview Crips. This alliance expanded the gang’s drug trafficking territory, and increased the number of gang members and associates available to preserve and protect the gang’s power, territory and profits through violence.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, gang members had violent confrontations with members of the rival Manchester OGs and other street gangs operating in the Northside area of Pittsburgh. Members and associates obtained greater authority and prestige within the enterprise based on their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs. According to court documents, the Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
According to court documents, Wallace was considered a respected member and leader of the enterprise due to his reputation for violence, as well as his demonstrated ability to instruct other members as to how to conduct the affairs of the enterprise, including the possession and distribution of firearms, acts of violence, the possession and distribution of controlled substances, and acts of witness intimidation. Wallace also served as a “hustler” for the gang. Hustlers were gang members who distributed controlled substances on behalf of the gang, in the territory controlled by the Northview Heights/ Brighton Place Crips.
According to court documents, Ford was considered a “gorilla” or “soldier” for the gang, providing protection for the enterprise through the possession and use of firearms, and the commission of violent acts.
Wallace and Ford are two of 26 defendants charged in February 2010 with being members of, and conducting racketeering activity through, the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. To date, 18 members of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
These cases are being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Pennsylvania Man Indicted for Soliciting Jihadists to Kill AmericansRead the Press Release
WASHINGTON – Emerson Winfield Begolly, 22, of New Bethlehem, Pa., was indicted by a federal grand jury in Alexandria, Va., today for allegedly soliciting Islamic extremists to engage in acts of terrorism within the United States and posting bomb-making instruction materials online.
The indictment was announced by Lisa Monaco, Assistant Attorney General for National Security; Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office; and David J. Hickton, U.S. Attorney for the Western District of Pennsylvania.
“Today’s case underscores the continuing threat posed by homegrown extremists seeking to use the Internet to incite violence,” said Assistant Attorney General Monaco.
“Emerson Begolly is accused of repeatedly using the Internet to promote violent jihad against Americans,” said U.S. Attorney MacBride. “These allegations demonstrate how young people in the United States can become influenced by – and eventually participate in – jihadist propaganda that is a serious threat to the safety of us all.”
“Today, the FBI is faced with a complex threat environment that combines homegrown extremism and the Internet,” said Assistant Director in Charge McJunkin. “The FBI’s top priority is stopping terrorism, and we remain vigilant against those who solicit violent acts in the United States.”
“Those who attempt to harm or kill Americans will face a determined, coordinated law enforcement effort,” said U.S. Attorney Hickton.
According to the two-count indictment, Begolly has been an active moderator of a popular, internationally known Islamic extremist web forum, the Ansar al-Mujahideen English Forum (AMEF), used by its members to promote and distribute jihadist propaganda. The indictment alleges that since July 2010, Begolly has placed a number of postings encouraging attacks within the United States, including the use of firearms, explosives and propane tanks against targets such as police stations, post offices, synagogues military facilities, train lines, bridges, cell phone towers and water plants.
Following the reported shootings in Northern Virginia at the Pentagon and the Marine Corps Museum in October 2010, Begolly allegedly posted a comment online that praised the shootings and hoped the shooter had followed his previous postings encouraging similar acts of violence that might “seem small but cause big damage.”
On Dec. 28, 2010, Begolly allegedly posted links to a 101-page document that contains information on how to set up a laboratory, conduct basic chemistry and manufacture explosives.
The indictment charges Begolly with solicitation to commit a crime of violence, which carries a maximum penalty of 10 years in prison, and distribution of information relating to explosives, destructive devices and weapons of mass destruction, which carries a maximum penalty of 20 years in prison.
On Feb. 2, 2011, Begolly was indicted for allegedly assaulting federal agents and firearms-related charges in the Western District of Pennsylvania. He faces a maximum sentence of life in prison if convicted of the charges filed in that district.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
This case is being investigated by the FBI Washington Field Office. Assistant U.S. Attorney Neil Hammerstrom of the U.S. Attorney’s Office for the Eastern District of Virginia’s National Security and International Crime Unit, Assistant U.S. Attorney James Kitchen of the U.S. Attorney’s Office for the Western District of Pennsylvania, and Trial Attorney Stephen Ponticiello of the Counterterrorism Section in the Justice Department’s National Security Division are prosecuting the case.
Owner of Fraudulent Physical Therapy Company<br /> Pleads Guilty to Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Miami-area resident and owner of a fraudulent physical therapy company in Lakeland, Fla., pleaded guilty today for his role in a scheme to defraud Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Jorge Zamora, 48, pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Fla., to one count of conspiracy to commit health care fraud.
According to court documents, Zamora was an owner of Dynamic Therapy Inc. Zamora and his co-conspirators purchased Dynamic from its previous owners, and transformed it into a fraudulent enterprise. Dynamic purported to provide physical therapy services to Medicare beneficiaries, but in reality used the stolen identities of a physical therapist and scores of patients to bill Medicare for physical therapy services that were never provided.
According to court documents, from fall 2009 to summer 2010, Zamora and his co-conspirators submitted and caused the submission of $757,654 in fraudulent claims to the Medicare program by Dynamic. Zamora admitted that he and his co-conspirators submitted claims to Medicare for physical therapy services that were never provided.
Three officers of Dynamic Therapy also have pleaded guilty to conspiracy to commit health care fraud.
At sentencing, Zamora faces a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not been set.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Robert E. O’Neill of the Middle District of Florida; Steven E. Ibison, Special Agent-in-Charge of the FBI’s Tampa Division; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations’ Miami office.
This case was prosecuted by Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Christina M. Burden of the U.S. Attorney’s Office for the Middle District of Florida. The case was investigated by the HHS-OIG, Defense Criminal Investigative Service and FBI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Justice Department Files a Lawsuit Alleging Employment Discrimination by a Georgia Poultry Processing PlantRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against Mar-Jac Poultry Inc., a poultry processing plant in Gainesville, Ga., alleging that Mar-Jac requires all newly hired non-U.S. citizens to present documents issued by the Department of Homeland Security in order to secure their jobs, but the company does not require U.S. citizens to show any specific documentation. The Immigration and Nationality Act’s (INA’s) anti-discrimination provision prohibits employers from placing additional burdens on work-authorized employees during the hiring and employment eligibility verification process based on their citizenship status or national origin.
The department’s investigation revealed that Mar-Jac engages in a pattern or practice of discriminatory documentary conduct against non-U.S. citizens by requiring them to produce specific documents during the Form I-9 process. The non-U.S. citizens subjected to the practice were determined to be work authorized by E-Verify, the Department of Homeland Security’s Internet-based employment eligibility verification system.
“Employers are not allowed to impose more burdensome employment eligibility verification procedures on certain workers based on their citizenship status,” said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. “The Justice Department is committed to vigorously enforcing the anti-discrimination provisions of the INA, including those protecting employees from discriminatory documentary requirements.”
The lawsuit charging Mar-Jac with discriminatory practices was filed before the Office of the Chief Administrative Hearing Officer within the Executive Office for Immigration Review, another component of the Department of Justice.
The Office of Special Counsel for Immigration Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired); OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired); e-mail [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc
Justice Department Files Lawsuit Against Maryland Man for FACE Act Violation at a Planned ParenthoodRead the Press Release
WASHINGTON – The Justice Department today filed a civil complaint in the U.S. District Court for the District of Columbia against Richard Retta for violating the Freedom of Access to Clinic Entrances Act (FACE Act).
According to court documents, on or about Jan. 8, 2011, Retta physically obstructed a patient and volunteer escorts attempting to enter the Planned Parenthood of Metropolitan Washington facility in Washington, D.C., (PPMW). The FACE Act prohibits the physical obstruction of any person providing or obtaining reproductive health services with the intent to intimidate or interfere with that person.
In its complaint, the United States seeks an order preventing Retta from coming within 20 feet of PPMW’s gate entrance or physically obstructing PPMW patients, staff or volunteer escorts. The complaint also seeks monetary damages and penalties.
“Individuals who seek to obtain or provide reproductive health services have the right to do so without encountering hazardous physical obstructions,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will continue to aggressively enforce FACE against those who seek to violate the rights of their fellow Americans to safely provide or obtain such services.”
This civil action was filed by the Civil Rights Division Special Litigation Section Deputy Chief Julie Abbate and Trial Attorneys Aaron Zisser and Michelle Leung.